Has BlackBerry Ltd (NASDAQ:BBRY) Stock Finally Turned The Corner, For Good?

- September 28, 2017

BlackBerry Ltd (NASDAQ:BBRY) is up 15% for the day after earnings, and 55% for the year. BBRY stock owners are screaming “told ya so” to anyone who will listen, believing that BlackBerry is back. Could it be true?

Here’s what I heard from the second quarter:

  • BlackBerry reported non-GAAP revenue of $238 million, about $30 million higher than expected, and was “pleased with their execution”
  • BlackBerry thinks non-GAAP EPS will be positive in 2018. They see gross margin of 70% for year.
  • BlackBerry signed licensing deal Yangzhou New Telecom
  • Expects strong public sector business outside the U.S.
  • Cited major design win in auto industry that should provide high margin long-term growth.
  • BlackBerry announced Titanium Transportation Group has started deploying Radar-L across its fleet of flatbeds
  • BlackBerry pleased with licensing business performance.

The above are seven points likely playing a role in BBRY stock gains. These are points the market seems to be focused on. However, below is the data that we can’t get past.

Source: HADE Platform – It’s FREE

After such a epic decline, wouldn’t it seem reasonable or even expected that BlackBerry would have a dead cat bounce at some point? I look at the above data and I don’t see any area of meaningful improvement or optimism. There’s not one region where BlackBerry looks strong, yet it cites strong public sector business outside the U.S. I ask, where? For Apple?

Furthermore, why is BlackBerry celebrating every single deal it is expected to win, or should. The company claims to have a legitimate business that can stand the test of time, yet it celebrates auto deals, licensing deals, and Radar-L deployment in flatbed trucks? Keep in mind, this is a company that has been throwing spaghetti on the wall for years trying to find anything to stick. And that brings up the next image.

Source: HADE Platform – It’s FREE

Look at these business segments that were supposed to be growth drivers for BlackBerry Ltd (NASDAQ:BBRY) just a year ago. The performance is sad, as many BBRY stock owners don’t seem to realize just how bad it has gotten for the company, and how quickly.

During this “strong Q2”, the only segment to show growth was its Licensing, IP and other business with revenue of $56M, up 250% vs last year. That looks good, but it compares to the first year that BlackBerry starting monetizing itself from licensing and IP. How much revenue is possible from this strategy long-term?

The bottom line: Be very careful with BBRY stock. There is no data to suggest that BlackBerry Ltd (NASDAQ:BBRY) has turned the corner, or that BBRY stock gains will last.

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