BB stock forecast: Is BlackBerry a good stock to buy?

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What is the BlackBerry stock forecast for the former mobile phone giant?

Contents

BlackBerry, once the mobile phone of choice for the yuppie set, had a resurgence in 2021 thanks to the so-called ‘meme’ investing fad. The firm’s famous phones, with those tiny keyboards, were widely used in the business world before the rise of iOS and Android and the growth of touchscreen technology made its handsets look past their sell-by date.

BlackBerry transitioned those phones from a proprietary operating system to Android, but in 2016 announced it was licensing the design and production of future models.

The Canadian company – originally known as Research In Motion (RIM) – diversified and became a developer of cybersecurity and other specialist technology for business and industry. Especially for carmakers, who use its software for safety-critical and driver-assistance systems.

In mid-2021, the company announced its BlackBerry QNX software was embedded in more than 195 million vehicles, an increase of 20 million from the year before. In Q3, BMW Group became the latest to ink a multiyear deal to use the BB product, joining the likes of Ford, GM, Honda, Mercedes- Benz, Toyota and Volkswagen.

Executive chair and CEO John Chen said: “BMW selected QNX because of our deep expertise and strong track records in safety, reliability, as well as security. In addition to licensing our technology, we will be providing a professional services team to support BMW in the aggressive development timeline.”

Unlikely share boost

BlackBerry’s latest quarterly results have given investors some hope after the business received a somewhat unlikely share boost earlier in 2021 when it became a ‘meme’ stock – winning support from retail investors via social media, thanks to the WallStreetBets Reddit forum.

The online interest in the stock meant that the BlackBerry stock price went from $7.44 on 13 January 2021 to an intraday high of $25.10 on 27 January, a rise of more than 237% in just a fortnight. This was the highest the stock had reached since 2011.

Inevitably, the gains were fleeting, with BB stock halving in the two days that followed. Although prices did remain a little elevated for about a month, they succumbed to pressure and fell below $10 once again in early March. Despite that, BlackBerry had garnered attention among the general public for the first time in a long while. It rocketed past $15 in June, dropped again and flirted with $10 off and on for much of the year.

A dominant theme in the BlackBerry stock forecast has been the company’s efforts to monetise the patents it holds for technology relating to wireless networks, mobile devices and messaging. 

The company hit the headlines for all the wrong reasons in August 2021 when the United States Cybersecurity and Infrastructure Security Agency (CISA) said a flaw in BlackBerry’s embedded QNX real-time operating system could put cars and medical systems at risk and lead to “a malicious actor gaining control of highly sensitive systems, increasing risk to the nation’s critical functions”.

BlackBerry acknowledged the problem and issued patch installation instructions to update the software. While it was possible the flaw could be exploited, it said no one had done so.

What does the future for BB look like?

Chen said the company forecasts sequential revenue growth in Q4 for its cybersecurity line in the range of $125m (£94m) to $135m (£101m). For Internet of Things (IoT), the range is $50m to $55m, “returning to the pre-pandemic run rate”.

“We feel very good about the IoT business right now, but investors should keep in mind the auto industry production headwinds,” he said.

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BlackBerry quarterly report: Could be worse

BB price history

Date Close Change Change(%) Open High Low
Aug 17, 2022 6.63 -0.26 -3.77% 6.89 6.93 6.63
Aug 16, 2022 6.96 0.17 2.50% 6.79 7.11 6.63
Aug 15, 2022 6.77 0.17 2.58% 6.60 6.81 6.58
Aug 12, 2022 6.68 -0.07 -1.04% 6.75 6.77 6.64
Aug 11, 2022 6.63 -0.19 -2.79% 6.82 7.00 6.62
Aug 10, 2022 6.81 0.41 6.41% 6.40 6.89 6.40
Aug 9, 2022 6.49 -0.29 -4.28% 6.78 6.78 6.48
Aug 8, 2022 6.80 0.27 4.13% 6.53 7.07 6.53
Aug 5, 2022 6.69 0.21 3.24% 6.48 6.69 6.34
Aug 4, 2022 6.58 0.20 3.13% 6.38 6.59 6.38
Aug 3, 2022 6.47 0.29 4.69% 6.18 6.52 6.18
Aug 2, 2022 6.19 0.23 3.86% 5.96 6.30 5.94
Aug 1, 2022 5.97 -0.03 -0.50% 6.00 6.09 5.93
Jul 29, 2022 6.05 0.08 1.34% 5.97 6.09 5.92
Jul 28, 2022 6.02 0.22 3.79% 5.80 6.04 5.74
Jul 27, 2022 5.88 0.14 2.44% 5.74 5.90 5.63
Jul 26, 2022 5.65 0.02 0.36% 5.63 5.73 5.56
Jul 25, 2022 5.75 -0.01 -0.17% 5.76 5.88 5.69
Jul 22, 2022 5.84 -0.26 -4.26% 6.10 6.18 5.81
Jul 21, 2022 6.03 0.02 0.33% 6.01 6.17 6.01

BlackBerry’s quarterly results, for the three months ending 30 November 2021, beat Wall Street forecasts of a $0.07 per share loss.

The business’s revenue was down by almost 16% from $218m in the same quarter last year to $184m. But, on the other hand, it beat the average prediction of $177.25m via Refinitiv.

The company’s operating costs also showed improvement. These came to a total of $66m, down 76% year-on-year from $276m. 

That meant BlackBerry had a net income of $74m, a nice turnaround from the overall net loss of $144m in the preceding quarter. BB turned around from a basic loss per share of $0.23 in the 2020 Q3, to $0.13 in positive territory a year later. 

A selection of BlackBerry phones
BlackBerry made its name through phones but has since branched out – Photo: Shutterstock

Making the best of things

John Chen, BlackBerry’s executive chair and CEO, put a brave spin on things, saying in the 21 December 2021 earnings call:

“This quarter BlackBerry delivered solid sequential billings and revenue growth for both the IoT and cybersecurity businesses, beating expectations for the second consecutive quarter. We also beat expectations on earnings, despite the ongoing investment to drive future top- line growth. In IoT our QNX business achieved a quarterly record for design-related revenues, performing stronger than expected despite ongoing industry supply chain headwinds. On the cybersecurity front, we saw further traction for our recent unified endpoint security product launches with additional head-to-head wins against other next-gen players. I am excited about how the current organization is executing to take advantage of the market opportunities.”

The company said that automobile production bottlenecks due to Covid-19 closures and chip shortages would continue to affect the company, but improvement is on the way heading into Q4.

On the cyber side, we again seek the sequential growth in billings and revenue including more head-to-head wins against our key competitors, Chen said. The ongoing Log4Shell incident is a great example of the huge cyber market opportunity and also showcases our capabilities. While others are struggling to identify the impact on their products from open source call, we are responding rapidly and effectively. Overall, BlackBerry delivered a solid progress, beating both revenue and earnings expectations for the quarter.

Chen was also brimming with news of new clients in the banking, insurance and government sectors, including the US Navy, which became a new SecuVOICE customer. He rattled off a list that also included the Department of Homeland Security, the Dutch and Scottish governments, the US Department of Education, US Central Command, the Federal Aviation Authority, and the Internal Revenue Service.

BlackBerry price chart
BlackBerry price history chart – Credit: Currency.com

BlackBerry stock forecast and recommendations

The BlackBerry stock predictions are still not full of joy. The BB stock forecast for 2022 could be interesting, depending on how people and the markets respond to the company’s actions.

Out of nine analysts surveyed by CNN Money, the median forecast for the next 12 months is $9, a slight increase of 0.6% from where the BlackBerry stock price stood before the latest quarterly results were published.

There was at least one much gloomier prediction, with a forecast of $4.50 a share, representing a loss of almost 50%. There was still some room for optimism, though, with the highest BlackBerry stock forecast of $20 representing a more than doubling of the current price.

In terms of recommendations, the suggestions did not look too good for BlackBerry. Out of 11 analysts surveyed by CNN, five recommended selling BlackBerry stock, two said the company would underperform expectations, three said to hold BlackBerry and just one recommended buying.

FAQs

It could be. That depends if its recent unlikely rise is sustainable and if the company’s work with carmakers can blossom post-pandemic. However, we do have to point out that, while forecasts can often be wrong, the forecasts are gloomy, with an average prediction that the stock will fall over the next year. You will have to do your own research.

The forecasts say it could double. It could go on another short meme rally. You do need to remember, though, that prices can, and often do, go down, as well as up.

You can trade BlackBerry shares today in tokenised assets at Currency.com. Tokenised assets are crypto derivatives whose value is linked to the value of a particular asset. 

Currency.com offers the opportunity to buy with leverage, with easily defined stop losses and limits to close positions at a specified price. But while leverage will allow you to make bigger profits if a stock goes up, it will also magnify your losses if the price goes down.

BlackBerry Limited
Daily change
6.7
Low: 6.63
High: 6.7

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