Analyzing Adobe (NASDAQ:ADBE) and Blackbaud (NASDAQ:BLKB)

Adobe (NASDAQ:ADBE) and Blackbaud (NASDAQ:BLKB) are both computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, earnings, dividends, analyst recommendations, risk, valuation and institutional ownership.

Insider and Institutional Ownership

81.8% of Adobe shares are owned by institutional investors. Comparatively, 94.2% of Blackbaud shares are owned by institutional investors. 0.2% of Adobe shares are owned by insiders. Comparatively, 2.0% of Blackbaud shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Adobe and Blackbaud”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Adobe	$21.51 billion	7.01	$5.56 billion	$16.05	22.42
Blackbaud	$1.16 billion	2.69	-$283.17 million	($5.78)	-11.10

Adobe has higher revenue and earnings than Blackbaud. Blackbaud is trading at a lower price-to-earnings ratio than Adobe, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Adobe has a beta of 1.49, indicating that its stock price is 49% more volatile than the S&P 500. Comparatively, Blackbaud has a beta of 1.11, indicating that its stock price is 11% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings for Adobe and Blackbaud, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Adobe	3	11	13	1	2.43
Blackbaud	1	3	0	0	1.75

Adobe currently has a consensus target price of $433.41, indicating a potential upside of 20.42%. Blackbaud has a consensus target price of $70.50, indicating a potential upside of 9.90%. Given Adobe’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Adobe is more favorable than Blackbaud.

Profitability

This table compares Adobe and Blackbaud’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Adobe	30.01%	57.54%	24.79%
Blackbaud	-24.82%	61.72%	5.07%

Summary

Adobe beats Blackbaud on 12 of the 15 factors compared between the two stocks.

About Adobe

Adobe Inc., together with its subsidiaries, operates as a diversified software company worldwide. It operates through three segments: Digital Media, Digital Experience, and Publishing and Advertising. The Digital Media segment offers products, services, and solutions that enable individuals, teams, and enterprises to create, publish, and promote content; and Document Cloud, a unified cloud-based document services platform. Its flagship product is Creative Cloud, a subscription service that allows members to access its creative products. This segment serves content creators, students, workers, marketers, educators, enthusiasts, and communicators. The Digital Experience segment provides an integrated platform and set of applications and services that enable brands and businesses to create, manage, execute, measure, monetize, and optimize customer experiences from analytics to commerce. This segment serves marketers, advertisers, agencies, publishers, merchandisers, merchants, web analysts, data scientists, developers, and executives across the C-suite. The Publishing and Advertising segment offers products and services, such as e-learning solutions, technical document publishing, web conferencing, document and forms platform, web application development, and high-end printing, as well as Advertising Cloud offerings. It also provides consulting, technical support, and learning services. The company offers its products and services directly to enterprise customers through its sales force and local field offices, as well as to end users through app stores and through its website at adobe.com. It also distributes products and services through distributors, value-added resellers, systems integrators, software vendors and developers, retailers, and original equipment manufacturers. The company was formerly known as Adobe Systems Incorporated and changed its name to Adobe Inc. in October 2018. Adobe Inc. was founded in 1982 and is headquartered in San Jose, California.

About Blackbaud

Blackbaud, Inc. provides cloud software solutions to nonprofits, foundations, education institutions, and healthcare organizations in the United States and internationally. The company offers fundraising and engagement solutions, such as Blackbaud Raiser's Edge NXT, Blackbaud CRM, Blackbaud eTapestry, Blackbaud Luminate Online, Blackbaud TeamRaiser, JustGiving, Blackbaud Fundraiser Performance Management, Blackbaud Guided Fundraising, and Blackbaud Altru; and financial management solutions comprising Blackbaud Financial Edge NXT, Blackbaud Tuition Management, and Blackbaud Financial Aid and Billing Management. It also provides grant and award management solutions, consisting of Blackbaud Grantmaking and Blackbaud Award Management; education solutions, such as Blackbaud Student Information System, Blackbaud Learning Management System, Blackbaud Enrollment Management System, and Blackbaud School Website System; social responsibility solutions, which includes YourCause GrantsConnect and YourCause CSRconnect, and EVERFI; Blackbaud Merchant Services and Blackbaud Purchase Cards payment services; and Blackbaud's Intelligence for Good solutions, as well as Data Health, Insights, and Performance solutions and services. The company sells its solutions and related services through its direct sales force. Blackbaud, Inc. was founded in 1981 and is headquartered in Charleston, South Carolina.