Blackberry's Visibility To Near-term Profitability Is Starting To Improve - Analyst Eyes Value-creation Strategies

RBC Capital Markets analyst Paul Treiber reiterated the Sector Perform rating on BlackBerry Limited BB, with a price forecast of $3.

BlackBerry’s first-quarter revenues of $144 million exceeded estimates, driven by a robust performance in its cybersecurity segment. BlackBerry’s cybersecurity revenue is expected to range between $82 million and $86 million in the second quarter.

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According to the analyst, visibility to near-term profitability is improving, and BlackBerry plans to provide segmented financials in October.

Near-term stabilization of BlackBerry’s business and profitability may help lift valuation from trough levels, Treiber writes.

BlackBerry announced another $20 million of cost savings, which brings total annual savings to $125 million of the company’s $150 million target. Given the time to realize savings, the analysts note that the cuts are more likely to impact FY26.

Treiber raised FY26 adj. EBITDA estimates from $34 million to $41 million. The company also announced that it will provide fully segmented financials at its investor day in October.

However, the analyst cautioned that the company operates in markets with significant competition.

Per the analyst, a material re-rating in the stock is likely to be dependent on sustained profitability and growth, along with other potential value-creation strategies (e.g. sale/spin-out of Cyber).

The analyst lowered the FY25 revenue estimate to $600.2 million from $600.4 million.

Price Action: BB shares are trading higher by 9.28% to $2.415 at last check Thursday.

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Courtesy of BlackBerry