The company has moved away from making phones, and is now focusing on cyber security within the incredibly fast-growing market of the Internet of Things (IoT).
With all this excitement, however, investors have been expecting much more growth than they’ve been getting from this company. In the last year alone, the company has risen to a 52-week high of $15.50, but has fallen back down twice.
The stock currently trades at about $9.50 per share at writing, not far from its 52-week low of $8.85 per share.
The main reason for the low price is that of impatience. Investors have been promised a lot of movement, but they don’t seem to be willing to wait for it.
The acquisition of Cylance months ago was a huge move – the largest in the company’s history – but has yet to be fully integrated, despite CEO John Chen insisting the company is ahead of schedule.
On top of this news is the company’s strong future forecasts, where management believes BlackBerry is still on target to reach its full-year 2020 revenue growth of 23-27%.
But where investors should be looking is at the future of BlackBerry. The company has moved from hardware to software, and that means BlackBerry has created endless opportunities for itself.
From mobile phones to automated cars, BlackBerry can implement its software into nearly anything, as nearly everything will need to be kept secure as soon as it enters cyber space.
That’s what BlackBerry is (literally) banking on, already creating a name for itself with the next phase of IoT: the Enterprise of Things (EoT). This is where BlackBerry provides security for companies that use wireless and smart devices, which is pretty much every company.
BlackBerry thus introduced BlackBerry Secure, where the company will help businesses create secure connections within the IoT.
Cloud services, mobile phones, tablets, and things not even invented yet that might use a wireless connection are all included. BlackBerry is there to make sure those devices are secure in cyber space.
With news of data breaches happening almost every month, BlackBerry is in a prime position to grow once large companies catch on – and fast. And it’s already growing at an incredible rate. During its most recent quarter, revenue was up 23%. Yet again: shares remain incredibly low.
So when can investors expect a bump from BlackBerry?
It looks like strong quarterly reports won’t be enough to convince investors to buy, unfortunately. The acquisition of Cylance was a strong start, but BlackBerry needs more brand names signing on to really grab the interest of potential buyers.
However, that’s not to say that strong reports won’t help too. In fact, if BlackBerry manages to surpass expectations, and this could definitely see at least a slight bump in share price.
What it comes down to is that investors are scared after such a drop a decade ago. It’s hard to come back from that. However, investors should see today’s BlackBerry as an entirely new company, which leaves endless opportunities for a company that has already proven it has the experience to create a secure service for its clients.
As soon as large companies start signing on with BlackBerry, shares should sky rocket to at least fair value, a potential upside of 55% as of writing.
But shares could even double in the next 12 months, climbing up even further for those investors with even the slightest bit of patience.
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 Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool owns shares of BlackBerry and BlackBerry. BlackBerry is a recommendation of Stock Advisor Canada.