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BlackBerry Ltd. (TSX:BB) Stock Is Down 20% in October: Here Is Why I’d Buy Today

BlackBerry (TSX:BB)(NYSE:BB) stock fell another 1.7% on October 29. Shares have dropped 21% month over month as of this most recent close. Volatility in October has pushed BlackBerry stock into negative territory for 2018.

The October pullback has only made BlackBerry stock more attractive as we enter the final two months of 2018. Let’s go over three reasons why investors should not be shy about adding the Waterloo-based tech company to their portfolios right now.

BlackBerry looks oversold right now

BlackBerry stock hit a 52-week low of $11.35 during trading over the past week. Shares have reached the lowest point since September 2017. BlackBerry’s misfortunes have been exacerbated by the particularly turbulent conditions in the North American tech sector. The company was recently re-listed to the NYSE, but the tech-heavy NASDAQ is on pace for its worst month since October 2008, the height of the financial crisis.

BlackBerry’s technical outlook is not overwhelmingly positive, but a look at its recent earnings and growth potential is a good reason to have confidence in its performance going forward.

Outlook for the full-year fiscal 2019 is positive

The company released its fiscal 2019 second-quarter results on September 28. Total revenues fell to $210 million over $238 million in the prior year, but total software and services billings reported double-digit growth from the previous year. BlackBerry re-affirmed its outlook for fiscal 2019 and expects total software and services revenue growth between 8% and 10% for the full year.

The company is also projecting positive free cash flow for fiscal 2019. On a GAAP basis, net income came in at $43 million in Q2 fiscal 2019 compared to $19 million in Q2 fiscal 2018. This was primarily due to lower operating expenses.

Massive growth potential in the coming decades

BlackBerry’s successful-so-far foray into software has the chance to really take off in the coming decades. The company has secured a footprint in the fast-growing cybersecurity and autonomous vehicle software markets. Both are projected to post massive growth in the first half of this century.

Back in the summer, BlackBerry CEO John Chen said that it will take at least 10 years before self-driving cars will be seen on roads at all. Last year, Blackberry QNX launched testing of a self-driving car in what was hailed as the first on-street test of an autonomous vehicle in Canada. For now, Chen maintains that BlackBerry’s major revenue source in the automotive sector will be through infotainment systems that use software from the QNX division. BlackBerry posted a record-high quarterly revenue for BlackBerry Technology Solutions of $49 million in Q2 fiscal 2019 on the back of its automotive sector.

BlackBerry is in a fantastic position to see revenues rise on the back of these growing markets. Even in the short term, its revenue is expected to rise in the third and fourth quarters of fiscal 2019, according to Reuters analysts. Investors looking to add a long-term growth stock in the tech sector should seriously consider buying BlackBerry at its current price.

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Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool owns shares of BlackBerry. BlackBerry is a recommendation of Stock Advisor Canada.

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