Analyst Note| William Kerwin |
We’re maintaining our $7 fair value estimate for BlackBerry shares following fiscal first-quarter results that were modestly ahead of FactSet consensus and a hair below our own expectations. BlackBerry’s automotive business is signaling a rebound, but we await an inflection point for the firm’s cybersecurity business. We maintain our view that BlackBerry is aligned to long-term secular growth themes of connected and autonomous vehicles and zero-trust security, but that neither has given rise to an economic moat. We continue to expect BlackBerry to fall short of its ambitious fiscal 2027 analyst day targets, unless its execution improves, despite our forecast for meaningful growth. We view shares as undervalued currently, but caution investors that we assign a very high uncertainty rating to the no-moat stock.