Black Knight Snaps Up eMBS, Expands Mortgage Portfolio

Black Knight Inc (BKI) acquired performance data and analytics provider eMBS Inc for an undisclosed amount. Black Knight provides integrated software, data, and analytics to the mortgage, secondary market, and real estate industries.

Following the announcement, shares of the company fell almost 1.4% to close at $71.51 on May 17.

The addition of eMBS capabilities will complement Black Knight’s mortgage data portfolio. The comprehensive data will help the company to offer better analytics for GSE and Ginnie Mae loan pools, including REMIC. This will help in making better investment decisions thereby enhancing the yields on mortgage-backed securities (MBS) portfolios.

Black Knight CEO Anthony Jabbour said, “By integrating eMBS within the Black Knight solutions ecosystem, we can provide the industry’s preeminent agency data and analytics to clients of both companies, while helping them make informed decisions around mortgage-backed securities investment and research.”

He added, “eMBS is a valuable addition to our comprehensive ecosystem and will help Black Knight solidify our leadership in the mortgage secondary markets.” (See Black Knight stock analysis on TipRanks)

On May 6, Black Knight reported strong Q1 results. The company’s total revenues of $349.7 million surpassed the Street’s estimates of $340.6 million and grew 20% from the year-ago period. Also, earnings soared 19% to $0.56 per share, beating consensus estimates of $0.52 per share.

Following the Q1 earnings, Oppenheimer analyst Dominick Gabriele maintained a Buy rating and a price target of $94 (31.5% upside potential).

Gabriele said, “Continuing to anticipate incremental foreclosure revenues delayed until 1Q22, BKI expects limited further incremental headwinds ($11M 1Q21). 1Q21 earnings provide an encouraging starting point given stock’s relative underperformance since 4Q20 and increased revenue guidance.”

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating. That’s based on 4 Buys versus 2 Holds. The average analyst price target of $91 implies 27.3% upside potential to current levels. Shares have decreased almost 24% over the past six months.

Black Knight scores a 6 of 10 from TipRanks’ Smart Score rating system, indicating that the stock is likely to perform in line with market averages.

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