Is Blackbaud (BLKB) Stock Undervalued Right Now?

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company value investors might notice is Blackbaud (BLKB). BLKB is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 14.41. This compares to its industry's average Forward P/E of 22.92. Over the past year, BLKB's Forward P/E has been as high as 19.64 and as low as 13.39, with a median of 15.04.

Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. This is a preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. BLKB has a P/S ratio of 1.81. This compares to its industry's average P/S of 4.19.

Value investors will likely look at more than just these metrics, but the above data helps show that Blackbaud is likely undervalued currently. And when considering the strength of its earnings outlook, BLKB sticks out as one of the market's strongest value stocks.

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This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research

Source Zacks-com