Opinions Michael Sprung
BlackBerryBB.TOWATCHMar 28, 2016
Michael SprungStock 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)
It is not a Nortel disaster, which was smoke, mirrors and a lot of accounting. BB-T has stabilized their product, an android phone, with good reviews. They will never be a dominant force in the phone world again, but they have the resources to carry their own, however. He wonders where the earnings will come from down the road and he is not sure how long it will be. He admires management for stabilizing the company. They need to become more of a software company and less of a hardware company. Let the Chinese make the hardware and participate in developing the next cell phone the people are going to want to have.