Opinions Jim Huang
BlackBerryBB.TOCOMMENTJan 06, 2015
Stock price when the opinion was issued
As of Jun 05, 2026. Market Open.
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The guidance was weak, and BB faces numerous challenges. But the company is still undergoing a strategic review, following overtures for a takeover. This remains a possibility, but it is hard to endorse on that alone. Fundamentals remain weak and much worse than expected. The balance sheet is OK but its large cash cushion is gone. Cash flow has been negative the past two years. Speculative as a possible takeover, but not really endorseable as a long term holding right now.
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Premium contentBB is now trading at 4.4x times' Price/Sales. In 4Q-2023, the company’s revenue declined by -18.4% to $151M, in line with the estimates and EPS is -$0.02, beating estimates of -$0.07. The balance sheet is okay, with net debt of $17M. However, the trailing twelve-month cash flow is concerning, as the company generated -$263M.
The company announced a strategic reveiw which has given shares some support but we wouldn't view it as coming from a posiiton of strength and are not sure we see a whole lot of reason to be excited here.
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Premium contentThe forgotten Canadian cell phone developer has re-invented itself in the cybersecurity space and is investing heavily into AI technology - partnering with Amazon's web services. Although operating at quarterly loss, cash reserves are growing and it trades at under 2x book. We recommend placing a stop-loss at $4.25, looking to achieve $8.00 -- upside potential over 33%. Yield 0%
(Analysts’ price target is $8.03)
This is on a nice comeback trail. The stock has come up since John Chen took over about a year ago. He has done a lot of right things, including cutting costs to get to cash flow breakeven and narrowed the focus of the company to enterprise business users as well as software. A lot of things are taking shape, so he really likes the prospects however, the current stock price cannot be justified based on the short-term earnings. It has a lot of challenges because of the very small market share as well as continuing to lose service revenue which is high margin. You have to make a bit of a bet on this, but he thinks John Chen will be successful. It won’t be quick and easy.