BlackBerry (TSX:BB) Stock: Is There Actually 247% Upside?

BlackBerry (TSX:BB)(NYSE:BB) is one of the hottest stocks on the market, but there are some analysts that think shares will head even higher.

| More on:
thinking

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

BlackBerry (TSX:BB)(NYSE:BB) is one of the hottest stocks on the market, but some analysts think shares will head even higher. If some predictions come true, there could be 247% in upside, maybe more.

Is now the time to buy?

Growth is starting now

When do you want to buy growth stocks like BlackBerry? The best time is before the growth begins. Once it does, the valuation multiple will skyrocket. You can sense the difference by comparing BB stock with CrowdStrike (NYSE:CRWD) stock.

In many ways, CrowdStrike is similar to BlackBerry. Both companies focus on next-gen software to improve the cybersecurity capabilities of their customers. Yet CRWD stock trades at 52 times sales and BB stock trades at just six times sales.

Why the giant gap? The answer is simple: one company saw sales grow by 86% last year, while the other company experienced a sales decline of 14%. I’d pay a lot more for the first business, and so would the rest of the market.

But this is where you should get excited. By betting on growth before it arrives, you can score a valuation that’s nearly 90% cheaper than the peer group. You just have to take a bit of extra risk. Looking at the facts, BlackBerry appears poised to deliver.

Watch these markets closely

BlackBerry’s growth rates aren’t like CrowdStrike, but there’s reason to believe they’re set to rise in the months and years to come. The company spent the past decade winding down its failed smartphone business. Now, nearly all of its revenue is tied to cybersecurity software, which as CrowdStrike has demonstrated, can grow at rapid rates for extended periods of time.

Software is a wonderful place to be. Profit margins are high, sales are often recurring, and growth is simply a download away. Within the software space, cybersecurity looks particularly lucrative.

Every day, thousands of new devices get connected to the internet. All of these devices are vulnerable to hacking. That’s annoying and costly when it’s a computer or phone, and potentially lethal when we’re talking about self-driving cars. BlackBerry’s products help protect all of these endpoints, even red-hot segments of the market like crypto and blockchain.

“Malicious actors amassed $1.4 billion in stolen crypto over the first five months of 2020 alone,” I recently stressed. “This problem will only grow as cryptocurrencies like Bitcoin go mainstream. If you believe in decentralized currencies like Bitcoin, you should be bullish on cybersecurity firms that protect the billions of endpoints that become vulnerable due to poor tech or simple user error.”

Time to bet on BlackBerry stock?

Stocks like this are how big money is made. Shares could rise 1,000% based on multiple convergence alone. Then add the underlying organic growth to your returns. We’re talking a 10, 20, or even a 30 bagger.

The bet is that BlackBerry is about to turn on the jets. It has great products targeting hyper-growth market segments. Once the market gets a whiff of this growth, shares will rise sharply. The only question is whether you will wait for definitive proof.

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.

Tom Gardner owns shares of CrowdStrike Holdings, Inc. The Motley Fool owns shares of and recommends CrowdStrike Holdings, Inc. The Motley Fool recommends BlackBerry and BlackBerry. Fool contributor Ryan Vanzo has no position in the companies mentioned.

More on Tech Stocks

Dial moving from 4G to 5G
Tech Stocks

TFSA Investors: 2 Canadian Stocks With Unbelievable Staying Power 

Amid economic uncertainty, investors look for stocks that can thrive in any crisis and grow long term. Here are two…

Read more »

Make a choice, path to success, sign
Tech Stocks

Nuvei Stock Crashed 23% After Q2 Earnings: Why I’d Buy More Today

Nuvei (TSX:NVEI) stock could stage a sharp recovery soon, as it looks way too oversold after Tuesday’s big crash.

Read more »

A worker uses a double monitor computer screen in an office.
Tech Stocks

Got $2,000? Buy These 2 Tech Stocks and Hold Until Retirement

Tech stocks are on sale, but that might not be the case for much longer. Here are two top picks…

Read more »

Business man on stock market financial trade indicator background.
Energy Stocks

Market Volatility: 2 Value Stocks to Buy Right Now

The market volatility does not look like it will let up any time soon, but these two stocks are too…

Read more »

movies, theatre, popcorn
Tech Stocks

Cineplex Stock Shoots Up as Meme Stocks Rally

Cineplex (TSX:CGX) stock seems to have started a rebound after meme stocks started climbing on Monday. But should investors buy…

Read more »

Target. Stand out from the crowd
Tech Stocks

This Is, Hands Down, the Top Canadian High-Growth Stock to Buy This Week

I expect this attractive Canadian high-growth stock to rally in the near term, as it’s set to announce its latest…

Read more »

Businessman holding tablet and showing a growing virtual hologram of statistics, graph and chart with arrow up on dark background. Stock market. Business growth, planning and strategy concept
Tech Stocks

Why Sierra Wireless (TSX:SW) Stock Has Surged 79% in 2022

Sierra Wireless Inc. (TSX:SW)(NASDAQ:SWIR) is a tech stock that has soared on the back of a big acquisition announcement last…

Read more »

Financial technology concept.
Tech Stocks

BlackBerry Stock is Rallying! Buy Before It’s Too Late

BlackBerry’s improving fundamentals have helped its stock soar lately and outperform the broader market.

Read more »