Analyzing Shopify (NYSE:SHOP) and Blackbaud (NASDAQ:BLKB)

Blackbaud (NASDAQ:BLKB) and Shopify (NYSE:SHOP) are both computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, dividends, analyst recommendations, valuation and earnings.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Blackbaud	$1.15 billion	3.67	$1.82 million	$1.02	81.39
Shopify	$7.06 billion	19.00	$132.00 million	$1.07	97.17

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Blackbaud	4.61%	20.34%	4.51%
Shopify	16.84%	11.60%	9.37%

Institutional and Insider Ownership

94.2% of Blackbaud shares are held by institutional investors. Comparatively, 69.3% of Shopify shares are held by institutional investors. 2.0% of Blackbaud shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Risk and Volatility

Blackbaud has a beta of 1.03, meaning that its share price is 3% more volatile than the S&P 500. Comparatively, Shopify has a beta of 2.36, meaning that its share price is 136% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Blackbaud and Shopify, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Blackbaud	0	4	1	0	2.20
Shopify	1	16	23	1	2.59

Blackbaud currently has a consensus target price of $86.67, indicating a potential upside of 4.39%. Shopify has a consensus target price of $94.95, indicating a potential downside of 8.68%. Given Blackbaud’s higher probable upside, research analysts plainly believe Blackbaud is more favorable than Shopify.

Summary

Shopify beats Blackbaud on 11 of the 15 factors compared between the two stocks.

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.

About Shopify

Shopify Inc., a commerce company, provides a commerce platform and services in Canada, the United States, Europe, the Middle East, Africa, the Asia Pacific, Australia, China, and Latin America. The company’s platform enables merchants to displays, manages, markets, and sells its products through various sales channels, including web and mobile storefronts, physical retail locations, pop-up shops, social media storefronts, native mobile apps, buy buttons, and marketplaces; and enables to manage products and inventory, process orders and payments, fulfill and ship orders, new buyers and build customer relationships, source products, leverage analytics and reporting, manage cash, payments and transactions, and access financing. It also sells custom themes and apps, and registration of domain names; and merchant solutions, which include accepting payments, shipping, and securing working capital. The company was formerly known as Jaded Pixel Technologies Inc. and changed its name to Shopify Inc. in November 2011. Shopify Inc. was incorporated in 2004 and is headquartered in Ottawa, Canada.