Skip to main content

Market Overview

Blackbaud's Guidance Reset Sends Analysts To Sidelines

Share:
Blackbaud's Guidance Reset Sends Analysts To Sidelines

Software provider Blackbaud, Inc. (NASDAQ: BLKBmade a negative pre-announcement Monday after the close, lowering its non-GAAP revenue, operating margin, EPS as well as free cash flow guidance for 2018.

The Analysts

Stifel analyst Tom Roderick downgraded shares of Blackbaud from Buy to Hold and lowered the price target from $120 to $88.

Raymond James analyst Brian Peterson downgraded Blackbaud from Outperform to Market Perform.

Stifel: Lower Guidance Puts Stock In Holding Pattern 

The shortfall in Blackbaud's subscription revenue is surprising given the company's Q2 commentary that highlighted record bookings, Stifel's Roderick said in a Monday note.

This is notwithstanding ongoing challenges that are already known, such as top-line pressures due to the services business transitioning toward partners and weakness in U.K.-related payments.

The downward guidance adjustment is due to a reduction in one-time services related to the model transition to cloud; a reduction in transactional and payments-related revenue; and reduced expectations for subscription-based recurring revenue, the analyst said. 

"However, model transitions can also mask fundamental challenges, and when those do emerge, it likely takes several quarters to turn the ship back in a more positive direction," Roderick said.

The investments required to execute on faith-based, education and health care initiatives are likely to depress earnings in 2019, the analyst said. 

The guidance reset is likely to keep the stock in a new, lower holding pattern for two to three quarters, according to Stifel. 

No Near-Term Upside In Raymond James' Forecast

A combination of slowing services and payments revenue, recent changes to sales compensation plans and accelerated sales hiring efforts will ding Blackbaud's subscription growth and margin trends in the next several quarters, Raymond James' Peterson said in a Tuesday downgrade note. 

The analyst said he remains positive on Blackbaud's ability to monetize its dominant position in the $8-billion nonprofit software market.

"While shares could still offer attractive returns to more patient investors willing to invest on this reset, we don't believe we'll see a material move to the upside in the near-term." 

The Price Action

Blackbaud shares were falling 11.52 percent to $79.64 at the time of publication Tuesday. 

Related Links:

Tableau Software Upgraded By Deutsche Bank On 'Growing Evidence' Of Demand Strength

Tableau Software Revenue Could Exceed $2B In Revenue By 2022, KeyBanc Says In Upgrade

Latest Ratings for BLKB

DateFirmActionFromTo
Feb 2021BenchmarkUpgradesHoldBuy
Aug 2020Stephens & Co.Initiates Coverage OnOverweight
Apr 2020Evercore ISI GroupUpgradesUnderperformIn-Line

View More Analyst Ratings for BLKB
View the Latest Analyst Ratings

 

Related Articles (BLKB)

View Comments and Join the Discussion!

Posted-In: Brian Peterson Raymond JamesAnalyst Color News Guidance Downgrades Price Target Analyst Ratings Best of Benzinga

Need corporate guidance data?
Click here to see licensing options.

Latest Ratings

StockFirmActionPT
OTRKRBC CapitalDowngrades32.0
EVHCanaccord GenuityMaintains24.0
BMRNCanaccord GenuityMaintains91.0
ONTFCanaccord GenuityInitiates Coverage On65.0
MTZCredit SuisseMaintains114.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com