BLKB - Embedded Expectations Analysis - 2020 03 31
ï€ Blackbaud, Inc. (BLKB:USA) currently trades near corporate averages relative toUAFRS-based (Uniform) earnings, with a 21.3x Uniform P/E. At these levels, the market has somewhat bearish expectations for the firm, and management may be concerned about restructuring costs, their long-term positioning, and their data center migration
ï€ Specifically, management may be concerned about the impact of consistent restructuring costs, headcount increases, and their education partnership with Microsoft. Moreover, they may be exaggerating their future restructuring cost savings, the strength of their long-term positioning, and the reach of the Your Cause platform. Finally, they may be concerned about the progress of their migration from colo data centers to third party cloud data centers, and they may lack confidence in their ability to balance profitability and growth
Blackbaud is a cloud software company. The company is engaged in providing software solutions in cloud and hosted environments, providing payment and transaction services, providing software maintenance and support services, and providing services, including implementation, consulting, training, analytic and other services. The company's portfolio provides fundraising and relationship management, marketing and engagement, financial management, grant and award management, organizational and program management (such as education management, church management and ticketing), social responsibility, payment services and analytics.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
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