Should You Think About Buying Blackbaud, Inc. (NASDAQ:BLKB) Now?

Blackbaud, Inc. (NASDAQ:BLKB), is not the largest company out there, but it received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to US$66.88 at one point, and dropping to the lows of US$49.34. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Blackbaud's current trading price of US$49.34 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Blackbaud’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Blackbaud

Is Blackbaud still cheap?

Blackbaud appears to be overvalued by 28% at the moment, based on my discounted cash flow valuation. The stock is currently priced at US$49.34 on the market compared to my intrinsic value of $38.64. This means that the opportunity to buy Blackbaud at a good price has disappeared! But, is there another opportunity to buy low in the future? Given that Blackbaud’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

Can we expect growth from Blackbaud?

earnings-and-revenue-growth

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to more than double over the next couple of years, the future seems bright for Blackbaud. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? It seems like the market has well and truly priced in BLKB’s positive outlook, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe BLKB should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping an eye on BLKB for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for BLKB, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you'd like to know more about Blackbaud as a business, it's important to be aware of any risks it's facing. For example, we've discovered 3 warning signs that you should run your eye over to get a better picture of Blackbaud.

If you are no longer interested in Blackbaud, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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