Last update on 2024-06-07

Blackbaud (BLKB) - Piotroski F-Score Analysis for Year 2023 (Final Score: 8/9)

Blackbaud (BLKB): Piotroski F-Score for 2023 revealed with score 8/9. Dive deep into Blackbaud's financial health, profitability, and efficiency.

Short Analysis - Piotroski Score: 8

We're running Blackbaud (BLKB) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

Blackbaud's Piotroski F-Score is 8 out of 9, indicating a strong financial position through metrics of profitability, liquidity, and operational efficiency. The company has shown a positive net income and cash flow, improved return on assets, and an increasing asset turnover ratio. However, its leverage ratios are slightly increasing, share count is growing, suggesting possible dilution, and it has some room for improvement in current ratio and gross margin compared to industry medians.

Insights for Value Investors Seeking Stable Income

Blackbaud's high F-Score suggests it is a strong candidate for further investigation by investors seeking financially stable and potentially undervalued companies. Despite some concerns about leverage and share dilution, the company's overall positive trends in profit, liquidity, and operational efficiency make it worth a look, especially if you believe they can continue to improve their ratios and margins compared to industry averages.

For those who are interested in delving deeper into the specifics, the subsequent section provides a comprehensive exploration of the criteria.

Profitability of Blackbaud (BLKB)

Company has a positive net income?

Examining net income over time is crucial as it reflects the company's profitability and financial health.

For the year 2023, Blackbaud (BLKB) has reported a positive net income of $1,820,000. This is a good trend as it shows a positive bottom line, which is crucial for the company's valuation and investor confidence. Despite net income variability over the last 20 years—ranging from substantial profits, such as $65,933,000 in 2017, to a significant loss of $45,407,000 in 2022—the positive net income in 2023 indicates a potential turnaround or stabilization. Therefore, Blackbaud scores 1 point for this criterion.

Company has a positive cash flow?

Positive Cash Flow from Operations (CFO) indicates healthy operational profit, suggesting the firm's core business operations are generating sufficient cash.

Blackbaud (BLKB) reported a positive CFO of $199,634,000 in 2023, adding 1 point under the Piotroski Analysis. This cash flow level, while slightly decreased from $203,893,000 in 2022, demonstrates stability in core operational efficiency. Examining the 20-year trend, Blackbaud has consistently maintained positive operational cash flow, indicating robust core business health and efficient capital management. Despite minor year-to-year fluctuations, the overall positive trend is a strong indicator of long-term operational stability.

Return on Assets (ROA) are growing?

Change in Return on Assets (ROA) assesses how efficiently a company utilises its assets to generate profits. An increasing ROA is a positive indicator of improving operational efficiency.

Blackbaud's ROA improved from -0.0152 in 2022 to 0.0006 in 2023. Though still below industry median levels, this shift to positive territory suggests a notable enhancement in the company's asset utilisation capabilities. Such an improvement often signals that strategic or operational changes are yielding benefits. Compared to an industry median ROA of approximately 0.6741 in 2023, Blackbaud has room for considerable growth but is on the right track.

Operating Cashflow are higher than Netincome?

This criterion evaluates the sustainability of earnings by comparing cash flow from operations to net income.

In 2023, Blackbaud's operating cash flow is $199.63 million, while its net income is a mere $1.82 million. This demonstrates a solid trend, confirming that the company is generating more cash than its reported earnings, which can be a positive indicator of future financial stability. By looking at the operating cash flow over the last 20 years, we observe a significant growth from $36.58 million in 2003 to $199.63 million in 2023, outpacing net income, which has shown more variability and dropped to $1.82 million in 2023 from peaks above $45 million in previous years. Hence, Blackbaud scores 1 point for this criterion.

Liquidity of Blackbaud (BLKB)

Leverage is declining?

This criterion assesses the change in financial leverage for Blackbaud (BLKB) between two periods. A decrease in leverage indicates reduced financial risk.

The leverage ratio for Blackbaud (BLKB) increased from 0.2958 in 2022 to 0.2749 in 2023, indicating an increase in leverage hence a 0 for this criterion. Its leverage has shown several fluctuations over the past 20 years, with its lowest in 2003 at 0.0417 and peak at 2021 with 0.3334. Compared to historical values, the 2023 leverage of 0.2749 is still within a stable range indicating the company is manageable although it's slightly riskier.

Current Ratio is growing?

Current ratio represents a company's ability to pay off its short-term liabilities with its short-term assets.

The Current Ratio of Blackbaud (BLKB) increased from 0.7465 in 2022 to 0.7767 in 2023. This signifies a marginal improvement in the company's liquidity position. Adding this 1 point to the Piotroski score indicates a positive trend as the company enhances its capability to cover short-term liabilities. However, when compared to the industry median, which is 1.7519 for 2023, Blackbaud still lags significantly behind, suggesting its liquidity health is weaker relative to peers. Sustaining further improvements in the current ratio would be imperative for Blackbaud to match industry standards.

Number of shares not diluted?

Change in shares outstanding reflects a company's financing activities. Share decreases suggest buybacks, funded by profits or debt.

Blackbaud's (BLKB) outstanding shares increased from 51,569,148 in 2022 to 52,546,406 in 2023, marking an increment rather than a decrease. Consequently, the Piotroski F-Score here is set to 0. This rise in outstanding shares may point towards potential new equity financing or dilution due to options and other share-based compensations. Analyzing the 20-year data reveals episodic increases, suggesting past capital raising or stock-based remuneration trends.

Operating of Blackbaud (BLKB)

Cross Margin is growing?

Compare the Gross Margin of 0.5457 in 2023 with the Gross Margin of 0.5224 in 2022 and check if Gross Margin increased or decreased. If the Gross Margin increased in 2023 add 1 point if not set it to 0.

Analyzing the data, Blackbaud's Gross Margin saw an increase from 0.5224 in 2022 to 0.5457 in 2023, adding a point under this Piotroski criterion. This widening margin signifies improved efficiency in managing production and costs. Over the past two decades, the company's Gross Margin shows significant variation, emerging stronger against the industry's median in 2023 despite underlying volatilities. Higher Gross Margin vis-a-vis industry median indicators at 0.6741 symbolizes robust competitive positioning despite sectoral pressures.

Asset Turnover Ratio is growing?

Change in Asset Turnover assesses operational efficiency improvements. An increase signals better utilization of assets to generate sales, indicative of operational enhancements.

In comparing Blackbaud's Asset Turnover ratio from 2022 (0.3548) to 2023 (0.3744), the ratio has seen an increase this year. This uptick, however minor, adds 1 point in the Piotroski score, signaling minor operational efficiency improvements in utilizing its assets to generate sales. For a broader perspective, this ratio has exhibited a declining trend since 2003, when it was at 0.9303, indicating Blackbaud's operational efficiency has decreased long-term. Nonetheless, the recent improvement in 2023 is a favorable indicator worth monitoring.