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BlackBerry Ltd BB

Morningstar Rating
$2.49 −0.07 (2.55%)
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Company Report

BlackBerry Earnings: We Retain Our Long-Term Thesis and Valuation After Positive Results

We retain our fair value estimate for no-moat Blackberry at $4.40 per share as we maintain our long-term thesis after positive fiscal first-quarter results. Despite revenue coming in modestly above our model, weaker cybersecurity sales continue to weigh on overall top-line growth, and BlackBerry kept its full-fiscal-year guidance. We continue to like the growth profile of the Internet of Things business, which benefits from rising automotive software content and represents a strong competitive position for BlackBerry. In sum, we believe our short-term and long-term expectations for BlackBerry are intact. Shares rose about 8% after hours, responding positively to results beating guidance. Although shares continue to screen as undervalued, we would point investors to moatier software names under our coverage.

Price vs Fair Value

BB is trading at a 723% premium.
Price
$2.56
Fair Value
$3.30
Uncertainty
Very High
1-Star Price
$4.90
5-Star Price
$5.20
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

BlackBerry is the leader in embedded automotive software, with its solutions spanning most global OEMs and holding the highest security certifications.

Bears

BlackBerry doesn’t have the scale, breadth, or name recognition to compete in enterprise software with giants like Microsoft and VMware.

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News

Trading Information

Previous Close Price
$2.55
Day Range
$2.472.54
52-Week Range
$2.205.75
Bid/Ask
$2.48 / $2.49
Market Cap
$1.47 Bil
Volume/Avg
3.7 Mil / 10.9 Mil

Key Statistics

Price/Earnings (Normalized)
66.28
Price/Sales
2.41
Dividend Yield (Trailing)
Dividend Yield (Forward)
Total Yield

Company Profile

BlackBerry, once known for being the world’s largest smartphone manufacturer, is now exclusively a software provider with a stated goal of end-to-end secure communication for enterprises. The firm provides endpoint management and protection to enterprises, specializing in regulated industries like government, as well as embedded software to the automotive, medical, and industrial markets.
Sector
Technology
Industry
Software - Infrastructure
Stock Style Box
Small Core
Total Number of Employees
6,200

Competitors

Valuation

Metric
BB
CSCO
MSFT
Price/Earnings (Normalized)
66.2811.8538.92
Price/Book Value
2.044.1813.20
Price/Sales
2.413.4914.19
Price/Cash Flow
11.8130.17
Price/Earnings
BB
CSCO
MSFT

Financial Strength

Metric
BB
CSCO
MSFT
Quick Ratio
1.250.681.05
Current Ratio
1.430.891.24
Interest Coverage
−21.0019.4638.50
Quick Ratio
BB
CSCO
MSFT

Profitability

Metric
BB
CSCO
MSFT
Return on Assets (Normalized)
−1.28%15.60%19.65%
Return on Equity (Normalized)
−2.36%36.40%38.71%
Return on Invested Capital (Normalized)
−1.38%26.89%28.79%
Return on Assets
BB
CSCO
MSFT
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