Critical Survey: Blackbaud (NASDAQ:BLKB) and BIO-key International (NASDAQ:BKYI)

BIO-key International (NASDAQ:BKYI) and Blackbaud (NASDAQ:BLKB) are both small-cap technology companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, earnings, institutional ownership, profitability and dividends.

Profitability

This table compares BIO-key International and Blackbaud’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BIO-key International	-50.01%	-67.31%	-40.28%
Blackbaud	13.12%	197.49%	6.33%

Analyst Ratings

This is a breakdown of current recommendations for BIO-key International and Blackbaud, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BIO-key International	1	1	0	0	1.50
Blackbaud	0	3	2	0	2.40

Blackbaud has a consensus target price of $49.50, indicating a potential upside of 14.61%. Given Blackbaud’s stronger consensus rating and higher probable upside, analysts clearly believe Blackbaud is more favorable than BIO-key International.

Volatility & Risk

BIO-key International has a beta of 0.4, suggesting that its share price is 60% less volatile than the S&P 500. Comparatively, Blackbaud has a beta of 0.99, suggesting that its share price is 1% less volatile than the S&P 500.

Insider and Institutional Ownership

26.5% of BIO-key International shares are held by institutional investors. Comparatively, 94.2% of Blackbaud shares are held by institutional investors. 4.0% of BIO-key International shares are held by company insiders. Comparatively, 2.0% of Blackbaud shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares BIO-key International and Blackbaud”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BIO-key International	$6.09 million	0.42	-$7.16 million	($4.11)	-0.44
Blackbaud	$1.13 billion	1.74	$114.97 million	$3.20	13.50

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

Summary

Blackbaud beats BIO-key International on 13 of the 14 factors compared between the two stocks.

About BIO-key International

BIO-key International, Inc. develops and markets fingerprint identification biometric technology and software solutions, and enterprise-ready identity access management solutions for commercial, government, and education customers in the United States and internationally. The company offers BIO-key PortalGuard and PortalGuard IDaaS solutions, a customer-controlled and neutral-by-design cloud-based identity platform that allows customers to integrate with any cloud or on-premises SaaS application, as well as windows device authentication through IAM platform. Its solutions enable its customers to secure their workforces and student populations; and make their partner networks more collaborative. In addition, it provides BIO-key VST and WEB-key products; and Civil and Large-Scale ID Infrastructure solutions that develops finger-based biometric technology. Further, it offers finger scanners for enterprise and consumer markets under SideSwipe, EcoID, and SidePass brand names. The company was formerly known as SAC Technologies and changed its name to BIO-key International, Inc. in 2002. BIO-key International, Inc. was founded in 1993 and is headquartered in Wall, New Jersey.

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.