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BLKB – Market expectations are for continued Uniform ROA declines, but management is confident about SKY UX, customer security, and margins

July 8, 2021

  • Blackbaud, Inc. (BLKB:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings, with a 26.7x Uniform P/E. Even at these levels, the market is pricing in bearish expectations for the firm, but management is confident about their new SKY UX version, customer data security, and their margins.
  • Specifically, management is confident their new SKY UX version improves customer data security with multifactor authentication, that 1 out of 4 Blackbaud customers extended their solutions with the SKY application, and that free cash flow margin reached 7.9%. Also, they are confident adjusted EBITDA margin will reach approximately 25% in 2021 and that they have increased visibility into their near-term performance.