William Blair Gives Blackbaud Its Blessing, Initiates At Outperform

William Blair’s Justin Furby mentioned that Blackbaud, Inc. (NASDAQ: BLKB) “is the dominant provider of fundraising software to nonprofit organizations (NPOs) — a $6 billion-plus opportunity in which it is just 10 percent penetrated.”

Furby initiated coverage of the company with an Outperform rating.

In Favor Of Blackbaud

The analyst pointed out the Blackbaud offers a “compelling” alternative to point solutions, helping NPOs benefit from an integrated suite of applications that eliminates manual and often duplicate processes.

“It also boasts the industry’s largest database of donor and industry benchmark data—representing more than $100 billion of annual giving—providing unmatched analytics and insights,” Furby said.

Related Link: Blackbaud: Big Fish In The Small Non-Profit Software Pond

Transition To The Cloud

Since Michael Gianoni joined the company as CEO in early 2014, he has rationalized and integrated Blackbaud’s product portfolio, streamlined the company’s go-to-market initiatives and driven a focus on cloud.

Gianoni led the release of cloud solutions in 2015, replacing the midmarket CRM and financial offerings.

“The company is beginning year two of a five- to seven-year process of migrating this customer base to the cloud, which should provide a revenue lift for Blackbaud and expose the company to a bigger portion of the addressable market,” according to the William Blair report.

Management is now targeting organic revenue growth of 6–10 percent over the next couple of years, with an over-9 percent revenue growth guidance for 2016.

Furby believes growth could accelerate to the double digits with Blackbaud making progress on its transition.

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