After trending lower throughout 2017, the downdraft ended in April after BlackBerry (BBRY) reported quarterly results. The company reported strong revenue growth from software and its balance sheet will strengthen further after an arbitration win against Qualcomm (QCOM). In the last week, Macquarie's long-term $45 price target sent BBRY stock above $10 a share.
Macquarie forecast earnings of $1.82 per share by fiscal 2020. Analyst Gus Papageorgiou cited subscription sales of 1.5 million at $20/month for RADAR. RADAR is an IoT-based system that monitors trailer and container locations. Similar to Descartes Systems (DSGX), RADAR delivers transportation data that improves delivery efficiencies.
Though the analyst believes the stock is worth $11.80 near-term, the $45 price target is achievable if software sales for BBRY's security products continue growing. BlackBerry's security business includes BES UEM, WatchDox, SecuSmart, BBM Enterprise, and QNX.
Markets recognized the potential for RADAR and bid up shares of BlackBerry. QNX and BES UEM are the more likely drivers of revenue for the company. The BYOD – bring your own device – movement continues in the enterprise. BlackBerry is one of two leading firms offering secure mobile device management. Its acquisition of Good Technology gives its mobile app offering more options for its customers. VMWare's (VMW) AirWatch is comparable to BES UEM, but is more suitable for Apple iOS devices only.
Takeaway
Shares of BlackBerry may hover above $10 but should profit-taking send shares lower, value investors might want to take another look at the stock.
