BLKB
Blackbaud, Inc.
$31.55
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 42.7% below fair value
You pay
$31.55
Bear
$45.19
Fair
$55.06
Bull
$63.75
Bear
$45.19
+43.2%
4% stage 1 growth, 11% discount
Fair
$55.06
+74.5%
6% stage 1 growth, 11% discount
Bull
$63.75
+102.1%
8% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (6% base case)
Terminal Value % of EV
35%
Implied Market Multiple
9.6x
Market is pricing in (growth)
-1.1%
vs 5.9% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $48.75 from 24 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $55.06 per share.
Warnings
Stock-based employee pay equals 81% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions