BlackBerry’s Negative Q4 Warning Shows Cybersecurity Business Going From Bad to Worse

We lower our fair value estimate for no-moat BlackBerry shares to $4.90, from $5.90, after a negative warning of upcoming fiscal fourth-quarter results. BlackBerry’s cybersecurity business is having a horrid fiscal 2023, which fully reflects execution issues from the firm, in our view, that we expect to continue. We continue to view the auto business as a bright spot but one mostly blocked out by the shadow of a struggling, larger cyber business. Shares dropped 13% on the news and continue to trade below our fair value estimate. We would point investors to moatier software names at this time.