The Motley Fool

Here’s the Real Opportunity for BlackBerry Ltd. (TSX:BB) Investors

There are few companies on the market today that I’ve been as vocal about as BlackBerry Ltd. (TSX:BB)(NYSE:BB). While the iconic handset-turned-software company may not appear to be the most appealing of buying opportunities in the market — at least initially — this is because the company is often misunderstood.

The tale of the two companies

Investors in BlackBerry will either be perennially disappointed with the company and its results, or they will see the long-time potential that BlackBerry holds and wait patiently for the growth to occur. The former group will consistently turn back to and compare results from prior years, when the hardware segment still provided a significant chunk of revenue, and legacy devices still churned out service access fees for the company.

By way of example, in the most recent quarter, BlackBerry realized US$8 million in revenue from the hardware segment, dropping over 78% from the same quarter last year, which saw the segment bring in US$37 million. Service access fees also dropped in the most recent quarter, coming in at US$16 million, down considerably from the US$38 million reported in the same quarter last year.

Factoring the hardware and service access fee segments into BlackBerry’s most recent results has the company coming in down 9.4% year over year on revenue, whereas excluding those segments depicts BlackBerry posting a very impressive 18.1% improvement year over year.

In other words, it’s time to stop comparing the past performance of BlackBerry to its current performance, as it was, in all ways, a different company. The current incarnation of the company is more focused, driven, and ready to succeed.

Interestingly enough, following the most recent quarterly results, BlackBerry’s stock price took a drop of over 10%.

While BlackBerry no longer makes devices directly, BlackBerry does still work with several hardware partners around the world to bring new handset devices to market with the BlackBerry name.

Should you invest in BlackBerry?

BlackBerry continues to offer investors an intriguing opportunity for long-term growth, which can be summarized in the following three key reasons.

The company’s foray into autonomous driving and growing importance in the infotainment market through its QNX operating system are only poised to grow in the coming years. Just three years ago, QNX was in over 50 million vehicles, and now that number has grown to over 120 million.

Similarly, BlackBerry’s resurgence in security and privacy coincided with a greater need by both companies and individuals to secure their information, resulting in yet another growth opportunity for investors. BlackBerry’s growing Enterprise segment as well as its Cybersecurity consulting business are perfectly aligned to see long-term growth.

Finally, there’s the recent pullback in the stock, which provides potential investors with an opportunity to buy BlackBerry at a discounted rate. BlackBerry currently trades at $13 — relatively flat over the course of the past year.

In my opinion, BlackBerry remains a great long-term investment for those investors looking for a tech stock with long-term potential.

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

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.

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