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

Different industries to invest in
Tech Stocks

TSX Information Technology in April 2024: The Best Stocks to Buy Right Now

For investors looking for the best stocks to buy to play a surge in IT spending in 2024 and beyond,…

Read more »

four people hold happy emoji masks
Tech Stocks

Forget Side Hustles: This Blue-Chip Stock Is Your Next Income Stream

Don't waste your time (literally) on a side hustle. Instead, consider this proven blue-chip stock that's seen average growth of…

Read more »

data analyze research
Tech Stocks

1 Stock I’m Buying Hand Over Fist in April Despite the Market’s Pessimism

Are you looking for a stock to buy this month despite the pessimism in the market?

Read more »

Male IT Specialist Holds Laptop and Discusses Work with Female Server Technician. They're Standing in Data Center, Rack Server Cabinet with Cloud Server Icon and Visualization
Tech Stocks

Constellation Software Stock: Buy, Sell, or Hold?

Constellation Software stock has rallied 186% in the last five years and is now valued at an expensive 100 times…

Read more »

Money growing in soil , Business success concept.
Tech Stocks

3 High-Growth Stocks That Could Help You Become a Millionaire

Are you looking to grow your nest egg? Here are three Canadian stocks that should be on your watch list.

Read more »

Man holding magnifying glass over a document
Tech Stocks

Watching This 1 Key Metric Could Help You Beat the Stock Market

One key metric that Buffett looks at is the return on equity. Here's why you should watch it.

Read more »

Daffodils in bloom
Tech Stocks

2 Best “Magnificent Seven” Stocks to Buy in April

Two surging mega-cap tech stocks are the best buys among the “Magnificent Seven” this April.

Read more »

clock time
Tech Stocks

Up 47%, Is it Time to Buy Payfare Stock?

Payfare (TSX:PAY) stock has been rising higher in the last six months after dropping significantly since 2021. Is it time…

Read more »