BlackBerry Ltd. (TSX:BB)(NASDAQ:BBRY) is set to report its first-quarter results on Tuesday, and analysts will be looking for further signs of a turnaround. So, what should we be expecting?

All eyes on software revenue

BlackBerry’s turnaround plans are centred around a shift from handsets to software. As part of that plan, CEO John Chen has laid out a very ambitious revenue goal: US$600 million in software-related revenue for this fiscal year, including US$100 million from BlackBerry Messenger. Tuesday’s update will provide the first hints of whether or not this will be achieved.

Unfortunately, there’s little reason for optimism. BlackBerry’s software business has already fallen short of expectations, and is likely being held back by perceptions of BlackBerry as a declining company.

Making matters worse, competition has increased dramatically, most notably from Microsoft. The Seattle-based giant is offering Mobile Device Management (MDM) services at bargain prices to some of its existing customers. Other players are also stepping up their game.

Top analysts are expressing their doubt. Morgan Stanley analyst James Faucette, a frequent critic of BlackBerry, thinks Mr. Chen’s software goal may be achievable in two to four years, but faster results would be unrealistic. Likewise, Credit Suisse analyst Kulbinder Garcha sees BlackBerry’s MDM business as one of the principal risks of a turnaround. He has a US$6 price target on BlackBerry shares.

What else should we be looking for?

There are a couple of other things worth keeping an eye on. One is the handset business, which remains in decline. Just last quarter the company shipped just 1.6 million handsets, which was down from 3.6 million in the same quarter the previous year. Tuesday’s results should provide more clues about the Passport and Classic, two phones released last year.

We should also watch for any clues about the progress of BlackBerry’s embedded-device computing division, which could be a major player in the booming Internet of Things market. The company’s QNX operating system is regarded as one of the best in the market, and unlike the rest of BlackBerry, it has momentum on its side.

Should you buy BlackBerry?

Here at The Motley Fool, we are believers in long-term investing. To put it another way, if you aren’t ready to hold a stock for 10 years, don’t even think about holding it for 10 minutes. So, we will never advise you to buy a stock just to hope for an earnings bump.

Especially not now. Consensus estimates call for US$690 million in revenue for BlackBerry this quarter, but there’s a very good chance the company won’t meet this target. You should stay away from the stock, at least for now.

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Fool contributor Benjamin Sinclair has no position in any stocks mentioned.