Will BlackBerry Ltd. (TSX:BB) Stock Get Back on Track in 2019?

BlackBerry Ltd. (TSX:BB)(NYSE:BB) stock has plummeted to a 52-week low in December, but the company is well positioned for a bounce back going forward.

| More on:
The Motley Fool

BlackBerry (TSX:BB)(NYSE:BB) stock was up 3.14% in early afternoon trading on December 12. Shares had dropped 14% over the past month.

BlackBerry has been a frustrating stock to own in 2018. The stock got off to a fantastic start and posted a 52-week high of $18.14 in January but has since suffered a steady retreat. That rise represented the high-water mark in the recovery period following the appointment of CEO John Chen back in November 2013. Chen has expressed confidence that the company, and the stock, will be able to gain traction in the near term.

“Today, if you ask our competitors about the software that manages devices, I think that they will tell you that they give us the gold star for it,” John Chen recently said in an interview with BNN Bloomberg. He went on to reiterate that BlackBerry is seen as “the number one safety solution” because of its QNX operating system. In the years to come, BlackBerry will be in a good position to maximize this advantage as the demand for security software increases.

Earlier this year, I’d discussed rising demand in the public and private sphere for improved cyber security. BlackBerry has established itself as a leader in mobile endpoint security solutions. It has won public contracts including with the U.S. State Department. The company also launched a cybersecurity consulting arm in October 2017.

On November 16, BlackBerry announced that it would acquire the California-based cybersecurity firm Cylance for $1.4 billion. John Chen has said that the deal will aid the company by integrating Cylance Artificial Intelligence with its end-point management business and its security and threat isolation business. Earlier this year, I’d discussed why investors should look to companies that are investing in artificial intelligence.

BlackBerry has also made strides as it has leveraged its QNX software to gain a foothold in the automated vehicle industry. The company achieved record-high quarterly revenue in its BlackBerry Technology Solutions segment in Q2 fiscal 2019 on the back of growth in its automated vertical segment. However, BlackBerry is facing steep competition from larger tech firms in this sector.

BlackBerry stock has struggled with volatility in 2018, but its technical readings have not slipped into oversold territory since late June. Currently, BlackBerry boasts an RSI of 38, which puts it outside technical oversold levels. However, shares are currently hovering around a 52-week low, which should be enticing for those who are looking to bet on its progress in these emerging sectors.

The problem for BlackBerry is a question of scale, and it has been the case since it lost the edge in hardware. Currently, BlackBerry boasts a market cap near $6 billion, but its revenue totals are still underwhelming. Fortunately, investors can expect results to pick up in the next two quarters if its own forecasts prove reliable.

BlackBerry remains an attractive speculative buy in December. It is good to see the company double down on its cybersecurity footprint with the acquisition of Cylance. The stock has been hammered along with the broader tech sector over the past several months. The future looks bright at BlackBerry, but the stock is recommended only for the most patient investors who can stomach its volatility.

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 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.

More on Tech Stocks

smiling couple at home with christmas tree
Tech Stocks

Holiday Bonus? You Could Double it With This TSX Stock

GSY stock gives investors an incredibly likely chance of doubling their holiday bonus in just over a year through a…

Read more »

Automated vehicles
Tech Stocks

BB Stock Rose 3% in November – Is it a Buy Today?

Blackberry stock remains battered and bruised, but momentum is building and revenue is ramping up, giving us a glimpse of…

Read more »

Businessman holding AI cloud
Tech Stocks

3 Best Artificial Intelligence Stocks to Buy in December 2022

Investors anticipating a strong comeback by the tech sector in 2023 should take positions in three of the best AI…

Read more »

tsx today
Tech Stocks

TSX Today: What to Watch for in Stocks on Friday, December 2

TSX investors may want to remain cautious ahead of Bank of Canada’s upcoming interest rate decision due next week.

Read more »

value for money
Tech Stocks

The Market Is Picking Up: 3 Top Growth Stocks to Buy While They’re Still Great Deals

Given their discounted stock prices and healthy growth prospects, I believe it's a good time to add these three stocks…

Read more »

Tech Stocks

3 Top E-Commerce Stocks to Buy in December 2022

Shopify Inc (TSX:SHOP) is a well-known Canadian e-commerce company. Is its stock a buy?

Read more »

stock analysis
Tech Stocks

2 FAANG Stocks to Buy Like There Is No Tomorrow

Canadian stock market investors can consider buying FAANG stocks such as Apple and Alphabet in December 2022.

Read more »

tsx today
Tech Stocks

TSX Today: Why Canadian Stocks Could Continue Rallying on Thursday, December 1

Most TSX stocks will likely remain positive today, as investors continue to react to positive economic releases from the U.S.…

Read more »