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BlackBerry Surges 21% in a Month: Is the Stock Still a Buy?
BBBlackBerry(BB) ZACKS·2025-05-14 14:01

Core Viewpoint - BlackBerry Limited's shares have increased by 21.3% in the past month, outperforming the Computer Software industry and the S&P 500 composite, which grew by 18.7% and 8% respectively [1] Price Performance - BlackBerry's stock closed at 3.92,whichisdown37.23.92, which is down 37.2% from its 52-week high of 6.24 [4] QNX Business Development - BlackBerry has shifted focus to its QNX platform, having sold its Cylance unit for 80millionincashand5.5millionshares,whileretainingitsAI/MLpatentassetsandtaxlosses[5]−TheQNXbusinessisexperiencinggrowth,particularlyintheautomotivesector,withstrongdemandinadvanceddriverassistancesystems(ADAS)anddigitalcockpitsolutions[6]−QNXrevenuesreached80 million in cash and 5.5 million shares, while retaining its AI/ML patent assets and tax losses [5] - The QNX business is experiencing growth, particularly in the automotive sector, with strong demand in advanced driver assistance systems (ADAS) and digital cockpit solutions [6] - QNX revenues reached 65.8 million, exceeding guidance of 60−60-65 million, driven by design wins in digital cockpit and ADAS [7] Revenue Guidance and Market Conditions - BlackBerry maintains a revenue guidance of 260−260-270 million, with QNX revenues expected between 250millionand250 million and 270 million, amid uncertainties from recent tariff changes [9] Secure Communication Division - The Secure Communication division reported fiscal fourth-quarter revenues of 67.3million,surpassingtheforecastof67.3 million, surpassing the forecast of 62-66million,drivenbystrongperformanceintheAtHocplatform[10]−Thedivisionisseeinghealthymomentumfromgovernmentagenciesandtopbanks,withanotableexpansionofadealwiththeMalaysiangovernment[11]FinancialPerformance−BlackBerry′sadjustedEBITDAforfiscal2025was66 million, driven by strong performance in the AtHoc platform [10] - The division is seeing healthy momentum from government agencies and top banks, with a notable expansion of a deal with the Malaysian government [11] Financial Performance - BlackBerry's adjusted EBITDA for fiscal 2025 was 39.3 million, reflecting a 54millionimprovementfromthepreviousyear,aidedbycost−cuttingmeasures[13]−Cashandinvestmentsincreasedby54 million improvement from the previous year, aided by cost-cutting measures [13] - Cash and investments increased by 144 million, supported by strong operating cash flow of $42 million and the initial payment from the Cylance deal [14] Analyst Sentiment and Valuation - Analysts have revised EPS estimates for the current fiscal year upward to 10 cents from 7 cents over the past 60 days, indicating bullish sentiment [17] - BB stock is trading at a trailing 12-month price/book multiple of 3.25, compared to the industry average of 5.87, suggesting it is undervalued [18] Investment Opportunity - The pivot towards the QNX business, improving financials, and strong estimate revisions present a compelling buying opportunity for BlackBerry stock [19]