Black Knight, Inc. (BKI) DCF Valuation & Fundamental Primer
Black Knight, Inc. (BKI) currently trades at $75.78 with an enterprise value of $13.69B. Our proprietary institutional model rates Black Knight, Inc. at 65/100 (Grade: B+ · Quality Software Operator). The current market price prices in an implied 5-year revenue CAGR of 15.5% vs. historical growth of 20.7% (Fairly Priced to Fundamentals).
Institutional fundamental teardown of Black Knight, Inc. (BKI) covering SEC 10-K/10-Q cash flow conversion, SBC dilution friction, and Reverse-DCF valuation hurdles.
Black Knight, Inc. (BKI) 3-Scenario DCF Valuation Range
Stress-test BKI's 5-year growth, target FCF margin, WACC, terminal methodology, and SBC/dilution friction in real time.
Split between 5-Year Explicit Cash Flows and Discounted Terminal Value
2D Institutional Valuation Sensitivity Heatmap
Implied share price & upside/downside spread across 25 valuation states (Current Price: $75.78).
| WACC \ Terminal | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 8.5% | $101.65 +34% | $107.90 +42% | $115.19 +52% | $123.80 +63% | $134.14 +77% |
| 9.3% | $91.51 +21% | $96.43 +27% | $102.08 +35% | $108.64 +43% | $116.33 +54% |
| 10.0% | $83.17 +10% | $87.13 +15% | $91.62 +21% | $96.74 +28% | $102.65 +35% |
| 10.8% | $76.21 +1% | $79.44 +5% | $83.07 +10% | $87.16 +15% | $91.82 +21% |
| 11.5% | $70.30 -7% | $72.98 -4% | $75.96 +0% | $79.29 +5% | $83.04 +10% |
Institutional Software Quality Scorecard (65/100 · Grade B+)
Solid software model with clear operating leverage, partially offset by standard SBC or moderate burn.
Positive FCF but lower conversion efficiency due to capex or timing
Elevated equity dilution; SBC consumes substantial operating cash flow
High-quality software margins with healthy balanced growth and profitability
Positive net cash cushion; self-funding operations with zero insolvency risk
Core Investment Strengths & Moats
- Healthy unit economics: 72.7% gross margin
- Net cash positive: $668.5M balance sheet buffer
Key Operational & Dilution Risks
- Substantial SBC dilution drag: SBC is 18.3% of revenue ($426.2M)
Reverse-DCF Solver: What Growth is Priced Into BKI?
Market implies 15.5% annual revenue growth over next 5 years (33.8% dilution-adjusted), in line with company run-rate.
Headline Reverse-DCF ignores Stock-Based Compensation (18.3% of revenue) and annual share dilution (1.8%/yr). Accounting for both requires 33.8% 5-year revenue CAGR to justify $75.78/sh on a true per-share economic cash flow basis.
Black Knight, Inc. (BKI) 5-Year Fundamental Forecast
| Statement Line Item | TTM Audited Base | TTM | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|---|---|
| Revenue | $2.33B | $2.33B | $2.81B | $3.39B | $4.10B | $4.94B | $5.97B |
| Gross Profit | $1.69B | $1.69B | $2.04B | $2.47B | $2.98B | $3.59B | $4.34B |
| Operating Income (EBIT) | $-79.2M | $-79.2M | $-95.6M | $-115.4M | $-139.2M | $-168.1M | $-202.9M |
| Stock-Based Compensation (SBC) | $426.2M | $426.2M | $514.5M | $621.0M | $749.5M | $904.6M | $1.09B |
| Unlevered Free Cash Flow (FCF) | $482.1M | $482.1M | $581.9M | $702.4M | $847.8M | $1.02B | $1.24B |
| SBC-Adjusted True Cash Flow | $55.9M | $55.9M | $67.5M | $81.4M | $98.3M | $118.6M | $143.2M |
Software & Cloud Services Peer Comparables & Rule of 40 Regression
Rule of 40 vs. EV / Revenue Multiple Regression
OLS Fit: EV/Rev = -28.4 + 0.78 × (Rule of 40) · R² = 83%Stocks below the gold regression line trade at a discount relative to their Rule of 40 compounding efficiency.
| Company | Ticker | Market Cap | TTM Revenue | Gross Margin | FCF Margin | Rule of 40 | SBC % Rev | EV / Rev |
|---|---|---|---|---|---|---|---|---|
| Black Knight, Inc. | BKI | $11.88B | $2.33B | 72.7% | 20.7% | 41.4% | 18.3% | 4.8× |
| ServiceNow | NOW | $152.61B | $10.98B | 79.2% | 31.1% | 54.2% | 15.9% | 13.9× |
| Workday, Inc. | WDAY | $50.35B | $8.00B | 75.0% | 27.4% | 43.9% | 19.0% | 6.4× |
| Salesforce | CRM | $217.10B | $37.90B | 77.2% | 32.8% | 42.8% | 8.4% | 5.8× |
| Datadog | DDOG | $46.05B | $2.68B | 80.8% | 31.1% | 57.7% | 21.3% | 17.4× |
| Snowflake Inc. | SNOW | $71.79B | $3.63B | 66.5% | 25.2% | 57.7% | 40.8% | 20.0× |
| Hubspot | HUBS | $19.89B | $2.63B | 85.0% | 21.3% | 52.7% | 19.2% | 7.7× |
| Peer Cohort Median Benchmark (N=6) | 78.2% | 29.2% | 53.5% | 19.1% | 10.8× | |||
EV / Revenue Multiple Compression Stress Test
| Multiple Scenario | EV / Revenue | Implied Enterprise Value | Implied Equity Value | Implied Share Price | Delta vs Current |
|---|---|---|---|---|---|
| Current Multiple | 4.8× | $11.21B | $11.88B | $75.78 | 0.0% |
| -20% Multiple Compression | 3.9× | $8.97B | $9.64B | $61.47 | -20.0% |
| -35% Multiple Compression | 3.1× | $7.29B | $7.96B | $50.75 | -35.0% |
| Software Baseline Floor (5.0× EV/Rev) | 5.0× | $11.65B | $12.31B | $78.55 | +3.9% |
Frequently Asked Questions: Black Knight, Inc. (BKI) Valuation
What is Black Knight, Inc. (BKI)'s intrinsic DCF valuation and implied share price?
Based on audited SEC 10-K/10-Q filings and a 5-year 3-statement discounted cash flow (DCF) model, Black Knight, Inc. (BKI) has a Base Case implied value of $91.62 per share (with a Bear Case of $41.54 and a Bull Case of $161.77), compared to its current price of $75.78. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.
What is Black Knight, Inc. (BKI)'s Rule of 40 score and Free Cash Flow margin?
Black Knight, Inc. achieves a Rule of 40 score of 41.4%, combining a 20.7% revenue growth run-rate with a 20.7% TTM free cash flow margin on $2.33B in trailing twelve-month revenue. In the Software & Cloud Services peer cohort, the median Rule of 40 benchmark is 53.5%.
What revenue growth rate is priced into BKI stock according to Reverse-DCF analysis?
At $75.78 per share (Enterprise Value of $11.21B), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of 15.5%, compared to Black Knight, Inc.'s historical CAGR of 20.7%. Overall market expectations are rated as "Fairly Priced to Fundamentals".
How does Black Knight, Inc. compare to Software & Cloud Services software peers?
Black Knight, Inc. (BKI) earns an institutional Software Quality Score of 65/100 (Grade B+ — Quality Software Operator). Across its Software & Cloud Services peer group (NOW, WDAY, CRM, DDOG, SNOW), the cohort trades at a median EV/TTM Revenue multiple of 10.8× and a median gross margin of 78.2%.
How does Stock-Based Compensation (SBC) impact Black Knight, Inc. (BKI)'s valuation?
Black Knight, Inc. recorded $426.2M in TTM stock-based compensation (18.3% of revenue). When treating SBC as a cash-equivalent compensation expense, Black Knight, Inc.'s SBC-adjusted free cash flow yield is 0.5%, scoring 10/25 on our Shareholder Dilution Friction pillar.