Opinions John O'Connell, CFA
BlackBerryBB.TOCOMMENTJul 13, 2015
John O'Connell, CFAStock 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)
John Chen is doing a good job of turning the business around. The hardware business continues to be very, very challenged, and it is a lousy business to be in. It’s a software game now and they seem to be making some good progress. Their security features are very attractive. The question is can Chen make something out of this. It is still very early days in a very challenged environment. He thinks the stock is worth not much more than $15. If there is some takeover speculation and the stock gains in strength, don’t believe it, but take your money and move on.