BlackBerry (TSX:BB) used to be the stock to beat. The former smartphone maker reached all-time highs on June 19, 2008 when shares hit $147.55! Yet since then, shares have dropped further and further, with the price of BlackBerry stock now at about $3.75. That’s an enormous drop of 97% as of writing.
Even in the last year things haven’t been great. Shares are down 31% in that time, with the days of its meme status stock surge well behind it.
But could BB hit those prices again? What’s more, could BlackBerry stock hit all-time highs in the future?
Here’s what would have to happen
Big business
BlackBerry already got rid of its smartphone business and is now fully focused on three areas. Those areas are cybersecurity, the internet of things (IoT), and autonomous vehicles. Each have a lot of competition, and BlackBerry stock will need to differentiate itself from other rivals to succeed. So let’s look at how it’s doing this.
The autonomous vehicle business in particular has two benefits, which are the QNX Neutrino and IVY platform. QNX provides a real-time operating system that is widely used by the automotive industry. IVY is designed specifically for connected vehicles to collect, analyze, and monetize data. Many partnerships have already been made for this software alone. Yet, of course, it will have to contend with electric automakers like Google and Tesla.
QNX also bleeds over to the IoT business. It’s now in autonomous vehicles as well as industrial devices. BlackBerry Spark also provides manageable communication between devices, with a focus on security. This provides recurring revenue and has large market growth ahead. But companies like Microsoft and Amazon are also wanting a piece of the pie. And it already operates in a fragmented industry where not everyone can connect.
Then there’s cybersecurity, where the company has a long history thanks to its smartphone business. The Cylance acquisition was also quite beneficial, making it a leader in artificial intelligence in the process. Its Unified Endpoint Management (UEM) platform allows BlackBerry to manage all devices from a secure location as well. And cybersecurity may be the biggest market to get in on among them all. And again, it offers recurring revenue, with BlackBerry ahead in this regard. Still, businesses from Crowdstrike to Palo Alto are already established.
Is it enough?
The question is whether all this is enough to see the company surge further. In the past, the focus on smartphones alone was enough. Now, the company is dipping into many areas, and it could be fragmenting the business.
Analysts believe that several factors could increase the share price. That would include a clear strategy to leverage all these business, with signs of future financial progress. Blackberry would also need to continue signing major contracts and use its brandname as a legacy innovator to its advantage.
What’s more, it will need to address all challenges before they become issues. This would include cybersecurity threats and the uncertainty of IoT data. Analysts in general believe it holds strength in cybersecurity, with potential for IoT and autonomous vehicles perhaps still up in the air.
Bottom line
Earnings are due in April for BlackBerry stock, so all this will need to be focused on by investors and analysts alike. In particular, look to earnings per share to see how the company is managing profitability. See if recurring revenue is increasing, which would show increasing confidence in the company’s products. Further, consider what guidance for the company might look like going forward. Also keep an eye on momentum between quarters, to see if the company is seeing overall growth for the last year. If this can be achieved, it might just be that BlackBerry stock will return to all-time highs. Though I doubt it will be in 2024.
