Blackbaud, Inc. (BLKB): what the price requires
The current priced-in claim for Blackbaud, Inc. (BLKB) is temporarily suppressed because the live engine record is unavailable. The dated report remains a snapshot, not a current market read.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/BLKB
Headline
| Field | Value |
|---|---|
| Ticker | BLKB |
| Company | Blackbaud, Inc. |
| Current price | $31.08/sh |
| Composition | Contractual recurring 64% / Transactional recurring 34% / One-time services and other 2% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 9.8% |
| Operating margin today | 16.4% |
| Margin compression implied | -6.6pp |
| Multiple paid | 14x operating income |
The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.
The price sits below what even a 5%/yr operating-profit decline would warrant; the inversion reports a bound, not a solved growth path.
Solve inputs: computed at a 7.2% cost of capital with 4% terminal growth over a 5-year stage.
Reconcile: at the x-ray's 9.3% required return this reads ~5.6%/yr; the models below use their own rates.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | +0.31σ |
| cohort percentile (of 177 peers) | 18 |
| implied end-window share | 0% |
Valuation X-Ray
The price is supported by asset-based and earnings-power and relative-multiple and growth-DCF value. A value/asset-supported name, not a pure growth bet.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 0.74x | 4 | justifies |
| Earnings | 0.82x | 4 | justifies |
| Relative | 0.29x | 5 | justifies |
| Growth | 0.70x | 3 | justifies |
Families that justify the price: Asset, Earnings, Relative, Growth
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 5.6%); the inversion above states its own rate.
Per-Model Detail (n=16)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $88.22 | 0.35x | yes | FCF base $0.3B, growth -1% (input: historical growth), terminal g 0.5%, WACC 5.6%, 5yr projection |
| DCF Exit Multiple | Growth | $44.35 | 0.70x | yes | Exit EV/EBITDA: 8.7x / 10.7x / 12.7x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $74.84 | 0.42x | yes | P/E 25.08x (blended: static sector reference 35x + trailing (TTM) 10x), scenarios: 21.2x / 25.1x / 29.0x (bear / base = reference held flat / bull), EV/EBITDA 19.28x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $32.94 | 0.94x | yes | BV/sh $0.75, ROE (TTM) 408.8%, ke 9.3% |
| Two-Stage Excess Return | Asset | $621.60 | 0.05x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $17.11 | 1.82x | yes | Rev $1.1B, growth -1% (input: historical growth; tapered), Terminal P/S: 1.1x / 1.3x / 1.5x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $35.28 | 0.88x | yes | EPS $2.94, growth 2% (input: historical EPS growth), PEG=5.10 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $0.01 | 3108.00x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.00B × (1−18%) / WACC 5.6% → EPV (no growth) (excluded from median) |
| Residual Income | Asset | $57.37 | 0.54x | yes | BV $0.75 + 5yr PV of (ROE (TTM) 408.8% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $7.02 | 4.43x | yes | √(22.5 × EPS $2.94 × BVPS $0.75) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $105.84 | 0.29x | yes | EBITDA $0.24B × sector EV/EBITDA 25.0x |
| FCF Yield | Earnings | $46.72 | 0.67x | yes | FCF $306.9M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $24.65 | 1.26x | yes | SBC-adj FCF $0.21B (FCF $0.31B − SBC $0.09B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $94.86 | 0.33x | yes | EPS $2.94 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $0.48 | 64.75x | yes | BV $0.75 × (ROIC 3.6% / WACC 5.6%) (excluded from median) |
| P/Sales Sector | Relative | $196.56 | 0.16x | yes | Revenue $1.14B × sector P/S 8.0x |
| PEG Fair Value | Relative | $110.25 | 0.28x | yes | EPS $2.94 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $31.78 | 0.98x | yes | EPS $2.94 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $1.2b |
| Net debt / NOPAT (after-tax) | 7.64x |
| Net debt / operating income (pre-tax) | 6.30x |
| Interest coverage | 2.7x |
| Share count CAGR (buyback) | -2.5% |
| Burning cash | no |
Bullet Takeaways
At about $27 the market pays roughly 13 times company-wide operating income. That multiple sits below what even a 5% per year decline in operating profit would warrant. The price is not betting on growth; it is bracing for shrinkage.
The business does not look like it is shrinking. Contractual recurring revenue, about 64% of the total, plus transactional recurring revenue together make up the vast majority of sales, and the company is targeting mid-single-digit growth after divesting EVERFI.
The catch is the balance sheet. Net debt of about $1.15 billion sits at roughly 5 times trailing operating income with interest cover near 3.3 times. The buyback is aggressive and the cash flow is real, but the leverage is the variable that decides whether cheap stays cheap or re-rates.
Bull Case
The valuation models are arguing with each other, and the argument itself is the bull case. Look at the spread: Relative Valuation lands near $73, the SBC-adjusted FCF yield near $25, the FCF yield near $47, and the company-wide operating-income inversion says the price sits below what even a 5% annual profit decline would justify. When a profitable, cash-generative software business trades at roughly 13 times operating income, the market is pricing terminal decline. What the standard frames miss is that the revenue is contracted and recurring, not at-will.
The 10-K is specific on this. Contractual recurring revenue is "~64% of total revenue" and the company is "Targeting Mid-Single-Digit Revenue Growth." Because subscription fees "are recognized on a straight-line basis over the term of the arrangement," revenue arrives in an even, predictable pattern rather than in lumpy bursts. The filing notes that new product innovations "are expected to contribute to future bookings, product adoption and customer retention." This is a switching-cost business serving nonprofits, schools, and corporate-impact functions, the kind of customer that does not rip out its fundraising and donor system on a whim.
The near-term numbers back the recurring story. First-quarter 2026 revenue was $281.1 million, up 4.2% year over year, with net income jumping to $31.1 million from $4.3 million and GAAP diluted EPS of $0.67 against $0.09. Non-GAAP operating margin reached 29.6%. Management reaffirmed full-year 2026 guidance of roughly $1.173 to $1.179 billion of revenue, $430 to $438 million of adjusted EBITDA, and $280 to $290 million of free cash flow. And it is returning capital hard: 1.6 million shares bought back for $82.1 million in the quarter, a plan to direct at least half of free cash flow to repurchases through 2030, and $878 million still authorized. A company buying 5% to 10% of its shares a year while trading at a recession multiple is doing the heavy lifting the market refuses to.
Bear Case
The models that reach for the price are the honest ones, and they are the conservative ones. Strip out the asset-based methods, because Blackbaud's book value per share is tiny at about $0.75, which makes return on equity read above 400% and turns the excess-return models into noise. The Two-Stage Excess Return spits out $541 and Residual Income $58, both artifacts of a near-zero equity base, not real value. The frames worth weighting are the cash and multiple ones, and they cluster lower. The SBC-adjusted FCF yield, which charges the business for the stock it pays employees, lands near $25, essentially at the price. That is the conservative read, and it is the one that says the stock is fairly valued, not cheap.
The reason cheap can stay cheap is the debt. The company carries about $1.19 billion of gross debt against only $34 million of liquid assets, net debt near $1.15 billion. That is roughly 5 times trailing operating income, with interest coverage of only 3.3 times. A SaaS business that throws off cash can service that, but it leaves little room for error, and it competes directly with the buyback for every dollar of free cash flow. There is also a measurement wrinkle worth flagging: the operating-income figures from the EDGAR quarterly TTM and the record basis diverge by about 18%, so the leverage ratio is sensitive to which earnings number you trust.
The top line is the third worry. The computed revenue trend is roughly flat, growth of about negative half a percent, and the full-year 2025 GAAP revenue fell 2.3% as EVERFI was divested. Management points to 5.5% organic growth underneath, but the reported line still shrank, and the entire bull case rests on mid-single-digit growth actually showing up. If renewals slip or the nonprofit budget cycle tightens, the recurring base that justifies the multiple erodes, and a levered balance sheet turns a slow-growth software name into a value trap rather than a value play.
Valuation
Blackbaud is priced as a whole company on its operating earnings, and on that basis the price is low. At about $27 (June 27, 2026) the market pays roughly 13 times company-wide operating income, a level the inversion describes as below what even a 5% per year decline in operating profit would warrant. This is a bound, not a solved growth rate: the price already discounts shrinkage, so the buyer is not underwriting growth so much as betting against continued decline.
The model spread is unusually wide, and reading it requires discarding the distorted frames. Blackbaud's book value per share is about $0.75, so any method anchored to equity, the excess-return and residual-income models, blows up to figures like $541 that mean nothing here. Set those aside. The one frame that lands at the price is the SBC-adjusted FCF yield near $25, which is the most conservative because it charges the business for stock compensation. The blended X-ray reads about $58 across the six core methods.
The priced-in label is within range, which fits: the price is broadly consistent with a slow-growth but profitable software business, leaning cheap rather than expensive. The reliability is limited by thin comparison data, so treat the label directionally. What keeps this from being an obvious bargain is the balance sheet. Net debt near $1.15 billion at roughly 5 times operating income, interest cover of 3.3 times, and only $34 million of liquid assets mean the discount is partly a leverage discount. The valuation is cheap on earnings power and fair on conservative cash flow, and the debt is the reason those two readings have not yet converged upward.
Catalysts
First-quarter 2026 results, reported in late April, were the recent driver: revenue of $281.1 million, up 4.2% year over year, with net income of $31.1 million versus $4.3 million a year earlier and GAAP diluted EPS of $0.67 against $0.09. Non-GAAP income from operations was $83.4 million at a 29.6% margin, and non-GAAP diluted EPS reached $1.14. The company reaffirmed full-year 2026 guidance: roughly $1.173 to $1.179 billion of revenue, $430 to $438 million of adjusted EBITDA, $5.15 to $5.25 of non-GAAP diluted EPS, and $280 to $290 million of free cash flow.
Capital return is the standing catalyst. Blackbaud bought back 1.6 million shares for $82.1 million in the quarter and has committed to directing at least 50% of free cash flow to repurchases through 2030, with $878 million remaining under authorization and a stated plan to retire 5% to 10% of shares outstanding in 2026. At a low-teens operating-income multiple, that buyback compounds per-share value quickly if revenue holds.
The watch items are the recurring-revenue growth rate against the mid-single-digit target, the pace of share retirement, free-cash-flow conversion against the $280 to $290 million guide, and any further portfolio pruning after the EVERFI divestiture, which dragged 2025 GAAP revenue down 2.3% even as organic recurring revenue grew about 5.8%. Sources: Blackbaud Q1 2026 8-K and 10-Q and earnings transcript coverage (stocktitan.net, benzinga.com, fool.com).
Peer Cohorts (Per Segment, With Filing Citations)
Blackbaud (cloud software) (reported)
- PCTY (PAYLOCITY HOLDING CORPORATION)
- (no filing in the citation store)
- VERX (Vertex, Inc.)
- (no filing in the citation store)
- SPSC (SPS COMMERCE, INC.)
- (no filing in the citation store)
- MANH (MANHATTAN ASSOCIATES, INC.)
- (no filing in the citation store)
- TDC (TERADATA CORP /DE/)
- (no filing in the citation store)
- TYL (TYLER TECHNOLOGIES, INC.)
- (no filing in the citation store)
- EVCM (EverCommerce Inc.)
- (no filing in the citation store)
- SSNC (SS&C TECHNOLOGIES HOLDINGS, INC.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.