BB:CC - Is BlackBerry Stock a Buy?
2023-08-02 14:45:00 ET
BlackBerry ( TSX:BB ) is a Waterloo-based company that provides intelligent security software and services to enterprises and governments around the world. Today, I want to determine whether this former hardware giant is worth owning in the second half of 2023 and beyond. Let’s jump in.
How has BlackBerry performed over the past year?
Shares of BlackBerry have dropped 11% month over month as of early afternoon trading on Wednesday, August 2. Meanwhile, this tech stock has surged 39% so far in 2023. However, its shares are still down 21% in the year-over-year period.
This company allows investors to gain exposure to fast-growing industries
BlackBerry was one of the world’s hardware giants in the late 2010s. Unfortunately, its dominant position in the smartphone market was supplanted by the rise of Apple’s iPhone and Android devices. The scrappy Canadian upstart could not compete with the computing power of these new devices, and when it did pursue an update, it failed to re-establish momentum.
The company was forced to move forward with a complete reorientation of its core business. It elected to focus on software development, as it was still a leader in endpoint encryption compared to its peers. Rockstar chief executive officer John Chen would expand and refocus efforts in this space, leading to some solid successes. It has made promising achievements in the autonomous vehicle software space with its QNX software.
Fortune Business Insights recently valued the global cybersecurity market at US$153 billion in 2022. The same report forecasts that this industry will achieve a compound annual growth rate (CAGR) of 12% from 2023 through to 2030. Meanwhile, Technavio last projected that the global autonomous vehicle software industry would deliver a CAGR of 40% from 2022 through to 2026.
Should investors be happy with this company’s recent earnings?
This company released its first-quarter (Q1) fiscal 2024 earnings on June 28. Total revenue was reported at $373 million — up from $168 million in Q1 fiscal 2023. Meanwhile, Internet of Things revenue was reported at $45 million, and cybersecurity revenue hit $93 million. Licensing and other revenue was reported at $235 million.
BlackBerry’s net loss shrank to $11 million compared to a net loss of $181 million in the previous year. Adjusted net income rose to $35 million or $0.06 per diluted share compared to an adjusted net loss of $31 million, or $0.05 per diluted share, in the previous year.
On the strategic side, BlackBerry announced that its QNX software system is now embedded in over 235 million vehicles around the world — up 20 million vehicles compared to the previous year. Moreover, it launched the artificial intelligence-based Cylance cybersecurity solutions portfolio. According to the company, this seeks to “reduce alert fatigue” and lead to faster incident response and improved cloud defence coverage.
Here’s why I’m buying BlackBerry stock in early August 2023
Shares of this tech stock are currently trading in good value territory at the time of this writing. The company is still on track for solid revenue growth as it has established itself in two exciting spaces at the time of this writing. I’m still happy to own BlackBerry for the long term, despite its volatility.
The post Is BlackBerry Stock a Buy? appeared first on The Motley Fool Canada .
Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool recommends Apple. The Motley Fool has a disclosure policy .
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