Blackboard Inc.BBBB

Morningstar Rating

Stock Research and Analysis

by Sunit Gogia

Blackboard is the leading provider of collaboration software to educational institutions. We like its business model, which is built on recurring revenue from a sticky customer base, and we expect Blackboard to continue gaining market share.

Educational institutions are turning to new technological solutions to improve distribution of course content and enhance collaboration between instructors and students. Read more

Bulls Say

Blackboard is positioned to extend its dominance of the educational course software management market internationally, as witnessed by its recent deal to provide such software to all universities in Estonia.

The U.S. K-12 market offers an additional growth opportunity, and Blackboard software is already used by more than 400 U.S. K-12 institutions.

Blackboard's hosted application service provider model is more profitable and should enable the company to win contracts with institutions that lack the in-house IT resources to manage a course management application.

Revenue growth will benefit from cross-selling various Blackboard educational software products to existing customers. Read more

Bears Say

Intensifying competition from open-source alternatives and competitors such as Angel Learning could affect sales and profits.

Blackboard licenses its software on an annual subscription basis, thus providing customers opportunities to evaluate their options and potentially switch to competing products.

Blackboard's transaction software processes student debit card transactions and opens up the company to headline risk if there are malicious attacks on students' personal information.

The hosted ASP model is inherently less sticky because it reduces switching costs for customers. Renewal rates could decline as more customers sign up for this model. Read more

Strategy

Blackboard aims to increase sales of its course-management software by making it easier for customers to adopt its products and by cross-selling additional products to existing customers. The company is also increasing sales of its products abroad. Read more

Management

Michael Chasen has been CEO of Blackboard since 2001, and Matthew Pittinsky has been the chairman since the company's founding in 1997. We believe the management team has done a good job of leading the company to its dominant position in the course-management software market. Read more

Profile

Blackboard is the leading provider of course management and collaboration software to educational institutions. Customers license Blackboard's software on an annual subscription basis; the company's products are currently in use at about 29% of postsecondary institutions in the U. Read more

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