BlackBerry (TSX:BB) Stock: Expect 47% Upside

BlackBerry Ltd (TSX:BB)(NYSE:BB) stock traded at $10 in September of 2019. Expect shares to reach that level again, leading to 47% upside.

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BlackBerry (TSX:BB)(NYSE:BB) is a well-known stock, but it has experienced a difficult journey since the end of 2019. Last September, shares were priced at $10. Today, they trade at $6.80.

If BB stock reached the $10 mark again, there would be 47% in upside for investors that buy now. As we’ll see, it’s growing likely that shares will eventually hit that level, possibly as soon as the end of the year.

There aren’t many growth stocks on the market today that can match the near-term upside of BlackBerry.

The details are exciting

Forget everything you know about BlackBerry. In 2010, it controlled 20% of the global smartphone market. But last year, it didn’t produce a single phone. Today, the company is all about software, much of which you’ll never personally interact with, even if it’s taking over the globe.

As BlackBerry’s hardware empire of the previous decade faded away, it was forced to understand what made its products so successful in the first place.

A big clue was available in its customer base that was still holding onto their devices, years after they went out of style. These customers included celebrities, politicians, and billionaires. They weren’t addicted to the user experience; they valued the security.

Fortunately, the cybersecurity market exploded in value. Today, some of the biggest companies on the planet specialize in digital security. That includes many of the hottest stocks. And while the market doesn’t realize it yet, BlackBerry built a cybersecurity empire.

For example, the company’s QNX platform secures vehicles from hackers. The software is already installed in 150 million vehicles worldwide. The need to protect vehicles from threats will only grow as our cars and trucks go fully autonomous. BlackBerry’s vehicle security platform is so impressive that Amazon recently partnered with the company to integrate their offerings.

The list goes on. BlackBerry has end-to-end security solutions for the internet of things, big data, healthcare analytics, and much more. The world is getting more connected, and BlackBerry is positioned for success.

Time to buy BlackBerry

If you want to double, triple, or even quadruple your investment, this looks like your best chance. All you need to do is connect the dots.

Last year, BlackBerry completed its evolution into a cybersecurity software company. It booked positive organic revenue growth for the first time in years. It’s clear that the business is building a high-margin, recurring revenue stream that will position it as a SAAS security leader.

Yet there’s a problem: the stock’s valuation is far behind the competition. CrowdStrike, for example, trades at 33 times sales. BB shares trade at just 3.3 times sales. If the valuation gap was eliminated, there would be 1,000% upside!

Of course, BlackBerry won’t achieve CrowdStrike’s valuation overnight. It is, after all, in the beginning of its transformation. But this is exactly what investors can get such a bargain valuation. The time to buy isn’t after the valuation spikes dramatically. The time to buy is now, before the market catches on.

It could take months or even years for this story to play out, but this potential 10-bagger is worth the price of admission. The 47% in upside to $10 per share should be just the start.

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.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. David Gardner owns shares of Amazon. The Motley Fool owns shares of and recommends Amazon and CrowdStrike Holdings, Inc. The Motley Fool recommends BlackBerry and BlackBerry and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. Ryan Vanzo has no position in any stocks mentioned.

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