Valued at a market cap of $2.9 billion, BlackBerry (TSX: BB) has grossly underperformed the broader markets over the past decade. BlackBerry exited the smartphone manufacturing segment in late 2016 to focus on enterprise software. Today, it provides intelligent security software and services to enterprises and governments globally through three segments: Secure Communications, QNX, and Licensing.
It offers cybersecurity solutions, including BlackBerry Dynamics mobile application platform, secure messaging through BBM Enterprise, unified endpoint management (UEM), and critical event management via AtHoc.
BlackBerry also provides QNX automotive software, the BlackBerry IVY vehicle data platform for connected cars, transportation monitoring through Radar, and Certicom cryptography solutions.
Despite its business pivot, BlackBerry’s sales have fallen from US$893 million in fiscal 2021 (ended in February) to US$535 million in fiscal 2025. Its adjusted net income has also narrowed from US$101 million or US$0.18 per share to US$12.5 million or US$0.02 per share in this period.
Due to its underwhelming performance, the TSX tech stock has fallen by 23% over the last five years. Let’s see if you should own BB stock while it still trades below $5.
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Is BlackBerry stock a good buy right now?
BlackBerry Limited delivered a robust first quarter for fiscal 2026, exceeding guidance across all key metrics and demonstrating the effectiveness of its strategic transformation into a cybersecurity and automotive software leader.
Total revenue in Q1 reached US$121.7 million, surpassing the upper end of guidance, while adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) grew over 55% year-over-year to US$16.4 million, also beating expectations.
The QNX automotive division showed strength, generating US$57.5 million in revenue, representing 8% year-over-year growth despite automotive industry uncertainties and tariff concerns. Royalties and development seat licenses drove growth, increasing 9% and 23%, respectively.
Management highlighted two key strategic initiatives for QNX: diversifying beyond automotive into general embedded markets, including robotics, industrial automation, and medical devices, and expanding their automotive software stack through pre-integrated middleware solutions. The company’s SDP 8.0 next-generation operating system showed impressive momentum with pipeline growth of 55% in the quarter, notably with 43% coming from non-automotive applications.
The Secure Communications division exceeded expectations at US$59.5 million in quarterly revenue, driven by strong performance from Secusmart products and notable deals with the German government. The division maintains stable fundamentals with US$209 million in annual recurring revenue and a 92% dollar-based net retention rate. Notable contract wins included the U.S. Marine Corps, Air Force, Senate, FEMA, and White House communications agencies.
BlackBerry showcased confidence in its financial position by initiating a US$100 million share buyback program, repurchasing US$10 million worth of shares during the quarter.
The software company achieved a positive GAAP net income for the first time in over three years at US$1.9 million. Looking ahead, management raised full-year guidance for Secure Communications while maintaining overall company guidance despite automotive market uncertainties, expecting total revenue between US$508–538 million and adjusted EBITDA of US$72–87 million for fiscal 2026.
Is the TSX tech stock undervalued?
Analysts forecast BlackBerry to increase revenue from US$535 million in fiscal 2025 to US$565 million in fiscal 2027. Comparatively, its adjusted earnings are forecast to expand from US$0.02 per share in fiscal 2025 to US$0.13 per share in 2027.
If BlackBerry stock is priced at 30 times forward earnings, it could trade around US$3.90 per share, indicating an upside potential of 10% from current levels, over the next 12 months.
