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What Impacted BlackBerry’s Stock Price Recently?

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Dec. 1 2017, Updated 10:35 a.m. ET

Shares have risen 18% since fiscal 2Q18 results

BlackBerry’s (BBRY) share price has risen almost 18% since the firm announced its fiscal 2Q18 results on September 28, 2017. It closed at $10.88 on November 27, 2017. BlackBerry beat analysts’ revenue estimates by 12% and the EPS (earnings per share) estimates by $0.05 in fiscal 2Q18, which drove the company’s share price higher.

Investors are cautiously optimistic about BlackBerry’s turnaround story as the firm pivoted from the smartphone market. There was a massive decline in sales due to increasing competition from Apple (AAPL), Samsung (SSNLF), and China’s (FXI) Huawei.

BlackBerry is investing in high-growth areas like IoT (Internet of Things) and the connected car market. In the above chart, you can see that BlackBerry’s flagship business segment’s (Software and Services) revenue rose at a compound annual growth rate of 67% between fiscal 2015 and fiscal 2017.

The non-GAAP gross margin also rose significantly from 49% to 62% during the same period.

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BlackBerry’s deal with Jaguar

Last month, the Wall Street Journal reported that BlackBerry was in talks with Jaguar Land Rover (TTM) to provide its QNX software for the latter’s next-generation vehicles. BlackBerry’s QNX allows original equipment manufacturers to build secure and scalable software solutions for connected and autonomous cars.

QNX provides a broad portfolio of solutions including in-car network security, ADAS (advanced driver assistance systems), infotainment, and acoustics. Jaguar is targeting sales of one million vehicles by the end of 2020. It might generate incremental licensing revenue of $25 million for BlackBerry.

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