Blackbaud Up 12.5% in a Month: How to Approach the Stock Now?

Blackbaud, Inc. BLKB is gaining from a strong product portfolio, AI-driven innovation and margin expansion. The company remains on track to achieve Rule of 45 status by 2030 and expects continued free cash flow margin expansion.In the past month, shares of the company jumped approximately 12.5%, outperforming the Zacks Computer – Software industry’s growth of 2.8%. It has also outpaced the Zacks Computer and Technology sector and the S&P 500 composite’s growth of 1.6% and 1.9%, respectively.Image Source: Zacks Investment ResearchLet’s take a closer look at BLKB’s fundamentals, growth drivers, competitive advantages and potential risks to assess its growth potential in 2026.Robust Product Portfolio Bodes WellBlackbaud is focusing on providing cloud software solutions and data-driven decisions, powered by artificial intelligence (AI), machine learning (ML), cognitive technology, predictive analytics and other advanced technologies. In the third quarter of 2025, Blackbaud unveiled a wide range of new embedded AI capabilities across its product portfolio at bbcon 2025, marking a major step toward its vision for a new era of intelligent action.At bbcon, the company introduced Agents for Good, its new agentic AI suite designed to help social impact organizations scale their effect with virtual team members. These AI agents act as active teammates, autonomously handling complex, high-value tasks under human guidance, freeing teams across fundraising, finance and corporate impact to focus on strategic goals. Also, the company announced significant enhancements to Blackbaud Impact Edge, introducing smarter AI features, advanced analytics and measurement tools, and deeper data insights.Additionally, Blackbaud launched its 2025 Ultimate End-of-Year Fundraising Toolkit, a comprehensive resource designed to help organizations maximize fundraising success. The Blackbaud Institute, in partnership with GivingTuesday, released a new report highlighting the long-term impact of GivingTuesday donors and offering strategies for nonprofits to foster stronger, year-round engagement. Before this, the company launched six innovation-focused initiatives to foster stronger links between solutions and teams and provide contextual intelligence.Blackbaud, Inc. Price and Consensus Blackbaud, Inc. price-consensus-chart | Blackbaud, Inc. QuoteIn a strategic move, Blackbaud partnered with Constant Contact to launch a new integration that allows social impact organizations to engage supporters more effectively across email, SMS, social media and other digital channels, all directly within Blackbaud Raiser’s Edge NXT. That said, the company remains focused on identifying and pursuing margin expansion opportunities, while simultaneously investing in critical areas of the business such as innovation, AI and cybersecurity.BLKB Gains From Margin Expansion and Strong Cash FlowBlackbaud is strengthening profitability through margin expansion, supported by cost discipline, platform modernization, cloud migration efficiencies and renewal price increases. For full-year 2025, Blackbaud anticipates non-GAAP EPS to be between $4.30 and $4.50. The company still projects non-GAAP adjusted EBITDA margin in the range of 35.4-36.2%. The company reported non-GAAP adjusted EBITDA margin of 33.7% in 2024 and 32.2% in 2023.Blackbaud’s strong free cash flow supports investment in innovation, acquisitions and shareholder returns. For 2025, adjusted free cash flow is expected to be $195–$205 million, up from prior guidance, with planned share repurchases of 5.2–7% of outstanding shares. The company is targeting the Rule of 45 by 2030 through steady organic growth, margin expansion and disciplined capital allocation.The company projects GAAP revenues between $1.120 billion and $1.130 billion, indicating approximately 5% organic growth at the midpoint on a constant currency basis. This represents a $5 million increase, driven by strong transactional revenue in the first half of the year and favorable foreign exchange impacts compared to initial expectations.HeadwindsBlackbaud faces meaningful headwinds, including intensifying competition from nonprofit-focused peers and large enterprise players, which pressures pricing and margins while requiring higher R&D spending. Ongoing acquisitions, though supportive of revenue, increase integration risk, strain management focus and have inflated goodwill and intangibles to 55.6% of total assets as of Sept. 30, 2025. A leveraged balance sheet further elevates risk, potentially limiting financial flexibility for buybacks, dividends and accretive growth initiatives in 2026.BLKB’s Undervaluation Is AppealingThe stock trades at a forward 12-month price-to-earnings (P/E) ratio of 18.46, below the industry’s average of 28.81.Image Source: Zacks Investment ResearchEnd NoteWith strong cash flow, robust product portfolio, consistent share repurchase program and margin expansion, BLKB continues to offer attractive upside despite the stock’s near-term headwinds. Hence, investors can consider adding it to their portfolio now.At present, BLKB carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Other Stocks to ConsiderSome other top-ranked stocks from the broader technology space are Open Text Corporation OTEX, Lantronix, Inc. LTRX and ACI Worldwide, Inc. ACIW. OTEX, LTRX & ACIW carry a Zacks Rank #2.OTEX’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 9.92%. In the last reported quarter, Open Text delivered an earnings surprise of 5%. OTEX shares have increased 23.4% over the past year.LTRX’s earnings beat the consensus estimate in two of the trailing four quarters, while in line in two, with the average surprise being 16.67%. In the last reported quarter, LTRX delivered an earnings surprise of 33.33%. Its shares have increased 52.2% in the past year.ACI Worldwide’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 32.75%. In the last reported quarter, ACIW delivered an earnings surprise of 10.1%. Its shares have gained 7.8% in the past six months.Zacks Naming Top 10 Stocks for 2026Want to be tipped off early to our 10 top picks for the entirety of 2026? History suggests their performance could be sensational.From 2012 (when our Director of Research Sheraz Mian assumed responsibility for the portfolio) through November, 2025, the Zacks Top 10 Stocks gained +2,530.8%, more than QUADRUPLING the S&P 500’s +570.3%.Now Sheraz is combing through 4,400 companies to handpick the best 10 tickers to buy and hold in 2026. Don’t miss your chance to get in on these stocks when they’re released on January 5. Be First to New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Open Text Corporation (OTEX): Free Stock Analysis Report Lantronix, Inc. (LTRX): Free Stock Analysis Report Blackbaud, Inc. (BLKB): Free Stock Analysis Report ACI Worldwide, Inc. (ACIW): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks