Stock Deep Dive: BlackBerry (TSX: BB)


Canadian investors don’t need to be introduced Blackberry (TSX: BB) (NYSE: BB). Most people know that the company was once the most innovative smartphone company in the world. However, his business started to fall apart and one bad decision after another led to Apple ultimately surpass it to become the consumer giant that it is today. In this article, I’ll discuss the current state of BlackBerry and whether I think it’s worth the investment.

What is the company doing now?

Currently, BlackBerry’s mission is to create a connected future that consumers can trust. This means the company has moved from its focus as a leader in the smartphone industry to one that secures online connections. It will be very interesting to see how BlackBerry becomes a competitor to the Internet of Things.

According to its website, BlackBerry secures more than 500 million devices, including 175 million cars. Its client list is very impressive, as it includes all G7 governments and 18 G20 governments.

With more than 39,000 patents, the company believes it is well positioned to secure approximately 96% of all cybersecurity threats in today’s landscape, including all endpoints. It currently continues to invest in the development of innovative products, devoting 24% of its turnover to research and development.

Is it worth an investment?

BlackBerry’s stock market history has not been the most illustrious. The company has grown from one of the most promising stocks in the market to becoming the largest company in Canada. Since then, its stock has fallen to a new low after a new low. As of this writing, BlackBerry stock is over 95% below its all-time high.

However, I said previously that the turnaround potential of this business is quite attractive. Company CEO John Chen is well respected. He is known for leading Sybase during its turnaround and eventual acquisition by SAP.

Its latest earnings report in September showed some promising numbers. The company reported non-GAAP revenue of $ 266 million for the second quarter of 2021. This compares to non-GAAP revenue of $ 261 million for the same quarter a year earlier. The company also reported that 90% of its software product revenue is recurring.

Finally, BlackBerry has included a list of achievements for the past quarter. First, he was able to co-develop the autonomous driving domain controller for Xpeng new high performance electric vehicle.

Additionally, BlackBerry announced that new customers using its BlackBerry Spark suites included Rolls Royce, the US Air Force, the British Ministry of Defense and the Royal Canadian Mint. This is a testament to the confidence luxury and government organizations have in BlackBerry product offerings.

I think it is still a little early to open a position in the company. Personally, I would prefer to find great companies that have a bigger change in market leader. However, BlackBerry appears to be on the right track. Assuming that this progress is sustained over the next couple of years, we could really see a great story of turnaround.

Takeaway idea

BlackBerry is no longer a smartphone company. It now works on securing endpoints for a variety of different industries. While I wouldn’t want to start a position with the company just yet, BlackBerry has shown continuous progress and could prove to be a great turnaround story.

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Fool contributor Jed Lloren owns shares of Apple. David Gardner owns shares of Apple. The Motley Fool owns stocks and recommends Apple. The Motley Fool recommends BlackBerry and BlackBerry.


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