BlackBerry Earnings: End Markets Remain Challenged but Management Is Guiding for a Rebound

We maintain our $4.90 fair value estimate for shares of no-moat BlackBerry after the firm reported fiscal second-quarter results. BlackBerry announced its high-level results earlier in September, and there were no surprises in the official filing. The firm’s cybersecurity business continues to struggle. While the fiscal-year outlook has been modestly lowered for the Internet of Things business, we maintain our long-term confidence in BlackBerry’s QNX software and our view that this is the strong part of the firm. We see shares as fairly valued and would point investors to moatier and more undervalued software names under our coverage.