BlackBerry (TSX: BB) is one of Canada’s most recognizable technology companies. Yet the market does not seem to recognize the opportunity that comes with BlackBerry’s long history of technological excellence. It’s certainly a volatile history, but today, all of this has translated into a very attractive opportunity to buy BlackBerry stock.
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BlackBerry stock: Undervalued and underappreciated
I’d like to start off by reviewing BlackBerry’s stock performance over the last few years. As you can see from the price graph below, in the last five years, the stock has declined 46% and it’s trading at roughly the same level as five years ago. It has been pretty much dead money for the most part. So, I can definitely see why the market lacks interest.
However, as investors, we should mainly be concerned with the future. While a negative history should surely be considered as one of the variables to look at, it should not overwhelm our judgment of a stock. So, let’s take a good look at BlackBerry’s present and future.
Recent results signal strength
BlackBerry reported its first quarter, fiscal 2026 results back in June. In a nutshell, these results were quite strong, beating the top end of the company’s guidance on both the top line and the bottom line.
Revenue of $121.7 million was accompanied by earnings per share of $0.02. This EPS result topped expectations that were calling for a break-even bottom line result, and it compared to a loss of $0.03 in the same period last year.
The strong earnings result was driven by a 55% increase in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), as well as efficiency gains. In fact, management reduced costs by $150 million last year in its quest to streamline and right-size the business.
The future of BlackBerry’s brands
As I mentioned at the beginning of this article, BlackBerry has a long history of technical depth and expertise, which has fed into the company’s solid reputation as a technology leader. BlackBerry’s two main segments, QNX and secure communications, are reaping the rewards.
The first segment, QNX, is BlackBerry’s machine-to-machine embedded software solutions segment. This includes operating systems that are enabling connected cars as well as medical devices, industrial applications, and robotics. This is BlackBerry’s high-growth segment.
The second segment is BlackBerry’s secure communications. This is a solid and steady business that provides secure communications for governments, banks, and more that must protect their information in order to protect their sovereignty and guard their privacy. Blackberry is the choice of many governments and corporations for their mission-critical communications.
More on BlackBerry’s QNX
QNX has a strong presence in the automotive space. Approximately 90 million cars are made every year. Of these cars, approximately 20% are more advanced software vehicles, with 80% having just the basic software. In the 20% of advanced software vehicles, BlackBerry has an over 90% market share.
The QNX business is made up of long-term contracts. We must therefore have patience. But once a car is produced and the royalties start coming in, it pretty much just falls to the bottom line — it’s all pure profit. The backlog for QNX is currently at $865 million.
In my view, the market is not recognizing the potential of this business. BlackBerry is driving towards consistent double-digit growth on the QNX side, with good business model leverage. The secure communications segment will continue to help fund QNX in order for BlackBerry to take advantage of the significant growth expected there.
The bottom line
While not without its risks, I believe that BlackBerry stock is a very strong buy. This article goes over some of the reasons why I am of this view, but you can also check out my other recent articles for more.
BlackBerry will be reporting its quarterly results on September 25, at which time we will be able to re-evaluate the company and its progress.
