Takeaways From Canaccord's Chat With BlackBerry Management

Canaccord Genuity hosted an investor meeting with BlackBerry Ltd BB that was "upbeat" and reinforced the company's long-term growth potential. 

The Analyst

Analyst T. Michael Walkley maintains a Hold rating on BlackBerry with an unchanged $9 price target.

The Thesis

Walkley shared the following takeaways in a Tuesday note from the research firm's chat with BlackBerry's management:

• BlackBerry's QNX could see revenue acceleration in fiscal 2020 and beyond from design wins.
• QNX revenue could over time increase as much as fivefold due to opportunities in ADAS and instrument cluster, among other areas.
• QNX represents a medium-to-long-term growth driver for BlackBerry.
• The cybersecurity company detailed its secure upgraded hypervisor value that can separate multiple functions running on a single CPU or high-performance computing unit.
• The recent Cylance acquisition could generate further uspide, as it opens up new revenue streams within the $11-billion cybersecurity endpoint market.

The research firm's neutral stance on the stock and $9 price target are based on roughly four times EV/sales on 2021 estimates of $1.253 billion. A change in stance may be justified ahead of BlackBerry's fourth-quarter earnings report in late March and the company's analyst day presentation in April if BlackBerry offers a clear long-term strategic plan and shows progress toward longer-term targets, Walkley said. 

Price Action

BlackBerry shares were down 0.62 percent at $7.96 at the close Tuesday. 

Related Links:

The Street Debates BlackBerry's Q3 Earnings

The Street Reacts To BlackBerry's Cylance Acquisition

Photo courtesy of BlackBerry.