Karen Thomas, M Sc, CFA | March 31, 2021 | Find out more: BB BB
BlackBerry (TSX: BB) (NYSE: BB) Stock Tested Again Today Reddit-induced surge in BlackBerry stock price is over Now we get back to the fundamentals Fundamentals at long term remain positive But the short term story is a little louder
BlackBerry released its fourth quarter fiscal 2021 results yesterday It was good in some ways but worrisome in others Let’s start with the good news BlackBerry QNX is at the forefront of automotive transformation in connected systems today and in autonomous vehicles tomorrow During the quarter, BlackBerry QNX continued to recover from being hit hard at the start of the pandemic
BlackBerry software has long been used for infotainment systems, acoustics and dashboard functions Its expertise has expanded more recently It now includes more advanced technologies such as advanced assistance systems to driving These systems are designed to improve the performance of the driver They do this by automating functions, giving warnings and intervening if necessary
So back to the good news of the day BlackBerry QNX returns to pre-pandemic levels In fact, the company expects billing growth to be in a double-digit range for the fiscal year 2022
But for now, earnings growth remains elusive for BlackBerry Should we ditch the stock as many investors seem to be doing today? I mean, the BlackBerry stock price is down 10%!
I don’t think we should ditch the stock In fact, I am a buyer today on this weakness
So BlackBerry CEO said a lot on earnings call More importantly, he said software and services revenues were rebounding to pre-pandemic levels But even pre-pandemic earnings at BlackBerry were problematic That’s because the company is in the construction phase The transition of its business model away from phones has been a long way
Even today, BlackBerry remains in the construction phase But the light at the end of the tunnel is becoming clearer For example, BlackBerry has won numerous industry awards for its software These awards were for its cybersecurity and its connected car This testifies to the level of quality of BlackBerry’s offering At the same time, BlackBerry is starting to see a resurgence of interest This is reflected in the growth in double-digit billing
The problem here and one of the main reasons BlackBerry stock is weak today is straightforward The company is in negotiations to sell a large part of its patent portfolio This has and will continue to negatively affect license revenue But I see this as short term pain for long term gain as it will lead to greater concentration BlackBerry holds patents in its areas of focus, cybersecurity and connected cars This will also lead to an entry of cash This inflow of funds will be used to accelerate the growth of BlackBerry For example, acquisitions can be made, there may be more spending on marketing, sales and technology All this will help the company penetrate its industries
BlackBerry stock is in free fall today Although the future is uncertain for BlackBerry, I am comforted by the following facts First of all, I think the Reddit-induced hype buy is in. out of stock at this point Second, I think BlackBerry is about to see big things in its two businesses With its award-winning software and partnership with Amazon Web Services, BlackBerry is in a strong position today I would buy today ‘hui at these levels
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This article represents the opinion of the author, who may disagree with the “official” recommending position of a premium service or advisor Motley Fool We are Motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.We therefore sometimes publish articles that may not comply with recommendations, rankings or other content.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of the board of directors of The Motley Fool Silly contributor Karen Thomas owns shares of BlackBerry David Gardner owns shares of Amazon The Motley Fool owns shares and recommends Amazon The Motley Fool recommends BlackBerry and BlackBerry and recommends the following options: January 2022 long calls to $ 1920 on Amazon and short calls from January 2022 to $ 1940 on Amazon
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Ebene News – CA – Why are BlackBerry stocks (TSX: BB) down 10% today?