There are few stocks that analysts have been as harsh on over the years as BlackBerry Ltd. (TSX:BB)(NASDAQ:BBRY). For many investors, that harshness (or is it bluntness?) was well-deserved.
After all, BlackBerry was the first smartphone manufacturer, bringing in billions in earnings. That golden era didn’t last very long for the company, however, as the tiny screened underpowered devices with physical keyboards were quickly overtaken by the increasingly flashy iOS and Android devices that were being released with a myriad of new features that BlackBerry could not compete with.
Last month I mentioned the potential growth options that BlackBerry was working towards over the long term, and why that potential was going to really begin to take off.
My view hasn’t changed, and BlackBerry’s recent results reaffirm that long-term potential.
In the most recent results announced just last week, BlackBerry once again bettered analyst estimates, which sent the stock soaring.
BlackBerry announced earnings of $0.03 per share, whereas analysts had been forecasting a mere break-even scenario for the company. Revenue for the quarter came in lower than expected at $226 million, but still managed to beat analysts’ forecasts of $215.4 million.
The software and services segment of the company is often looked to as the source of BlackBerry’s main revenue, especially since BlackBerry shuttered the hardware unit and put a renewed focus on enterprise sales last year.
Sales in the software and services segment saw an 11.5% increase in the quarter, coming in at $50 million, which was largely attributed to the nearly 3,000 customer orders.
Time for a BlackBerry reset
BlackBerry’s recent results were, in a word, impressive. The results led to the stock surging as much as 10% at one point, but the stock has since partially retreated from that high.
One of the issues that BlackBerry continues to struggle with is that some investors still see BlackBerry as “that device manufacturer from a decade ago.” When comparing results from even two years ago to the current quarter, the company does not appear to be on the end of a successful turnaround, but rather still circling the drain.
This couldn’t be further from the truth.
BlackBerry has a host of new opportunities, including a very desirable position in the emerging autonomous driving and IoT segments of the economy.
BlackBerry is also beginning to leverage the company’s well-known status as an authority on security by offering cybersecurity consulting services.
There’s also the loT market, where BlackBerry’s radar product offering is a simple, yet brilliant way to establish a recurring source of revenue and meet a long-standing asset tracking need of companies around the world.
Finally, BlackBerry’s device presence on the market remains strong thanks to several regional agreements with hardware vendors to design, manufacture, and market new devices bearing the BlackBerry name.
In other words, there is plenty of excitement and potential around BlackBerry, and the company remains a great growth opportunity for investment over the long term.
It's not Apple. Or Google. Verizon or AT&T. In fact, you've probably never even heard this company's name. Yet it's so vital to the "smartphone" revolution that its shares have doubled time and time again since they first hit the shelves. And if industry insiders are right, the rapidly escalating war between iPhone and Android is about to push this stock even higher.
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Fool contributor Demetris Afxentiou has no position in any stocks mentioned. The Motley Fool owns shares of BlackBerry. BlackBerry is a recommendation of Stock Advisor Canada.