Time to Get Bullish on BlackBerry Stock? Not Quite Yet, Says 5-Star Analyst
Stock Analysis & Ideas

Time to Get Bullish on BlackBerry Stock? Not Quite Yet, Says 5-Star Analyst

After initially balking at BlackBerry’s (BB) net loss tripling in Q1F23 to $181 million, once investors digested the quarter’s results, they appeared to take a more favorable approach. Shares pushed higher in the subsequent session by 7%, as the software maker beat expectations on both the top-and bottom-line.

The net loss was mostly on account of a one-time litigation settlement of $165 million, and the company’s adj. EPS of -$0.05 came in $0.01 better than the Street’s $-0.06 forecast.

And while the quarter amounted to the seventh in a row in which revenue growth declined, at $168 million (-3.4% year-over-year), the figure came in above the $160.7 million the analysts anticipated. The beat was driven by a 19% increase to IoT revenues, which hit $51 million and 6% growth for the cybersecurity segment which delivered sales of $113 million.

As for the guide, management stuck to its previous F2023 software and services revenue outlook of ~$682 million at the midpoint. Given the continued supply challenges affecting the auto industry, despite the IoT business’s strong finish to F2022 and decent start to F2023, the company also reiterated its prior forecast of revenue between $200 million and $210 million. The outlook for F2023 Cybersecurity calls for revenues to stay the same as last year.

“Given our expectations for steady growth in BlackBerry’s Cybersecurity business under the Cylance moniker in addition to improving growth in IoT as the supply chain issues subside, we think there’s room for potential upside moving through F2024 and beyond if management is able to execute on its long-term roadmap,” Canaccord analyst Michael Walkley commented.

However, until there is “further evidence the company can execute and post sustained growth trends with improving ARR levels,” Walkley’s rating stays a Hold (i.e., Neutral) while his $6 price target stays put too, suggesting shares have room for very modest upside of 3% over the coming year. (To watch Walkley’s track record, click here)

Generally speaking, the rest of the Street is on the same page. With 3 additional Holds and one Sell, the analyst consensus rates the stock a Hold. At $6.04, the average price target is practically the same as Walkley’s. (See BlackBerry stock forecast on TipRanks)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.


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