Why BlackBerry Is Rated a ‘Hold’ by 65% of Analysts

Analyst recommendations

Of the 18 analysts tracking BlackBerry (BB) stock, four have recommended a “buy,” 12 have recommended a “hold,” and two have recommended a “sell.” The average 12-month target price for BlackBerry is $11.61, which indicates that the stock is trading at a discount of 16.5% to average estimates.

Analysts have a high target price of $15.50 and a low target price of $9 for BlackBerry stock.

Why BlackBerry Is Rated a ‘Hold’ by 65% of Analysts

Can BlackBerry’s turnaround efforts drive its stock higher?

We’ve already seen how BlackBerry has pivoted from its smartphone manufacturing business to software and services. That business segment might be lucrative if BlackBerry can achieve revenue growth. Its gross margins are high (close to 76% in fiscal Q1 2019) and have improved from 63.8% in fiscal Q1 2018, driven by a higher mix of software and services revenue.

BlackBerry has managed to achieve positive earnings in each of the last four quarters. High-growth verticals such as the QNX operating system have helped offset declines from BlackBerry’s legacy businesses.

BlackBerry will need to deliver sustainable long-term growth to keep investors interested. Wall Street expects the company to return to revenue growth in fiscal 2020 and post double-digit growth in 2021.

Sales from BlackBerry’s Licensing, IP (Internet Protocol), and Other business almost doubled to $63 million in fiscal Q1 2019 and should be a key revenue driver over the next few quarters. BlackBerry’s Licensing revenue rose from $130 million in fiscal 2017 to ~$200 million in fiscal 2018.