Why BlackBerry Stock Could Double From Here

Here’s why the recent dip in BlackBerry (TSX:BB)(NYSE:BB) stock may be a great buying opportunity for long-term growth investors.

| More on:
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

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) has attracted the attention of retail investors for some time now. However, the meme stock hysteria we saw play out earlier this year was truly incredible.

Shares of this company skyrocketed more than 400% over a very short period of time, surging above $35 for the first time in approximately a decade. This move has indeed turned out to be short-lived, with shares now down near the levels BlackBerry started the year.

What to make of all this?

Well, let’s dive into the fundamental case for why some of the optimism around BlackBerry may not have been misplaced.

Why BlackBerry stock took off

Yes, the speculative mania took nearly every high-growth stock on a nice ride earlier this year. And companies like BlackBerry with higher than market average short interest took off to a greater degree.

However, apart from these factors, one must consider the other reasons investors may have been enticed to jump aboard. If that particular thesis hasn’t changed, one might view the recent downside move as a buying opportunity.

BlackBerry’s core cyber security-focused suite of software products in itself provides sufficient growth potential to get investors excited. However, a recent deal with Amazon really re-shapes the growth argument for this stock.

Amazon and BlackBerry are teaming up to develop BlackBerry IVY. This software platform is set to be a transformative piece of the IoT and connected vehicle space. This is the kind of growth sector investors want to be in right now. Accelerating growth alongside a backer like Amazon certainly makes for a very intriguing bull thesis for BlackBerry stock today.

Additionally, BlackBerry’s earnings, on the whole, were quite good. One-time reductions in revenue due to patent negotiations resulted in a recent miss. As we’ve seen with so many players of late, even earnings beats are welcoming selling, as the growth bar is set increasingly higher these days.

Bottom line

My view on BlackBerry is that this stock remains an undervalued growth play. On the basis of the company’s valuation, BlackBerry remains cheap relative to its peers. Additionally, I view BlackBerry’s potential growth profile as superior to that of a few months ago. In some sense, I think the buying pattern we saw at the beginning of the year was warranted with this stock.

With most of the speculative drivers out of the way, I think BlackBerry investors have a solid case for owning this stock at these levels. Unless anything material changes, BlackBerry could be a growth stock that outperforms the market this year.

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.

More on Tech Stocks

clock time
Tech Stocks

Now’s the Time to Load Up the TFSA With These 2 Top TSX Stocks

Here are two top TSX stocks that long-term growth investors may not want to give up on, especially at these…

Read more »

shopping online, e-commerce
Tech Stocks

Shopify (TSX:SHOP) Stock Recovers 30% From its 3-Year Lows: Should You Buy?

Shopify stock: Should you buy the dip or wait for more weakness?

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

What Market Correction? 2 High-Growth Tech Stocks That Are on the Rise

I don’t think it will be long before these two Canadian tech stocks are back to delivering market-crushing returns.

Read more »

grow dividends
Tech Stocks

Why Kinaxis (TSX:KXS) Stock Jumped 14% Last Week

Kinaxis Inc. (TSX:KXS) stock popped over the past week after adding yet another big company to its impressive stable.

Read more »

potted green plant grows up in arrow shape
Tech Stocks

TFSA Investors: Double Your Investments With These 3 Top Growth Stocks

Despite the volatility, I am bullish on these three stocks, given their solid growth potential.

Read more »

Arrow descending on a graph
Tech Stocks

2 Industries That Saw the Worst Decline Last Month

The TSX has been declining at a sharp angle since the beginning of June. And two industries (crypto and cannabis)…

Read more »

Dividend Stocks

TFSA Investors: Turn $1,000 Into $10,000 in 10 Years

10-fold growth within a decade is rare but not unheard of. You can capture this growth either by predicting a…

Read more »

Growth from coins
Tech Stocks

Got $1,000? Buy These 3 Under-$20 Growth Stocks to Earn Higher Returns

These under-$20 growth stocks can deliver solid returns in the long run.

Read more »