Could BlackBerry’s turnaround be complete? RBC equity analyst Paul Treiber believes it is.
Treiber sent a note to his clients indicating that BlackBerry, formerly named Research In Motion, is off its risk watch and has enough opportunities in the pipeline for a profitable future.
“The risks with BlackBerry’s turnaround appear to have diminished. The company is no longer dependent on SAF-related cash flow and the liability from hardware has been largely eliminated. As such, we are removing our Speculative Risk qualifier. Investor focus will shift to the growth of BlackBerry’s software business; new opportunities are emerging, but they are difficult to value at the moment,” said Treiber.
Since announcing its quarterly results last week, BlackBerry’s stock has significantly increased in value, now sitting at $10.90 CAD, which is up from $9.27 five days ago.
BlackBerry’s shift away from its hardware roots and into the ‘Enterprise of Things’ market started to take shape under current CEO John Chen two years ago. The company dropped its own BlackBerry 10 OS in favour of running Android. Recently, the decision was made to license its brand to various hardware manufacturers — such as TCL Communication, PT BB Merah Putih and Optiemus Infracom — to release new handsets. The next flagship BlackBerry is set to be the BlackBerry KEYone, which will launch in Canada in May.
In addition, there could be a new BlackBerry tablet and a wearable in the works, this time powered by Android. “We have taken a long-term and thoughtful approach to our licensing strategy, which includes an expansive view of the entire Enterprise of Things ecosystem,” said Chen.
“As part of this strategy, we will work with a wide range of manufacturers to integrate BlackBerry Secure software into both BlackBerry-branded and co-branded devices.”