Blackberry (TSX: BB) stock’s price rallied almost 20% yesterday off of better-than-expected quarterly results. The results were above the high end of management’s guidance, and they were a pleasant surprise to both management and shareholders. The momentum that this TSX stock is experiencing has been a long time coming and today, Blackberry is officially in profitable growth mode.
Let’s look into why Blackberry is a TSX stock to buy right now.
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Blackberry exceeds expectations
After a strong fiscal 2026, Blackberry has kept up the momentum in fiscal 2027. Total revenue increased 26% to $152.9 million. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 144% to $36.3 million. And adjusted earnings per share (EPS) came in at $0.04 compared to $0.02 in the same period last year.
Blackberry is now growing profitably, with long-term trends signalling more growth ahead. The QNX segment came in strong, with revenue up 26% to $72 million and gross margins of 86%. Its secure communications segment also grew after many quarters of stagnation. Revenue increased 24% to $74 million and adjusted EBITDA increased 110% to $20 million.
QNX: Strong long-term trends
Over the years, Blackberry has positioned itself as a leader in embedded systems and machine-to-machine connectivity. The company has been proving itself in the automotive space, digitally connecting cars. At this point, Blackberry’s reputation, its certifications, and its relationships with auto manufacturers is a strong competitive advantage for Blackberry stock.
Within the QNX segment, Blackberry has also been adapting its software for other uses. This includes industrial automation, robotics, and medical devices. It’s an area of QNX that has received less attention, but it is nevertheless also a very lucrative opportunity. Looking ahead, the long-term trends are strong. In the first quarter, QNX segment revenue increased 26% to $72 million. This was driven by all components of QNX, including development licenses, professional services, and royalties.
Looking ahead
Due to these strong results, Blackberry has increased its guidance for fiscal 2027. The company is now expecting earnings per share (EPS) to fall within the range of $0.16 to $0.20. Also, Blackberry is expecting operating cash flow of approximately $100 million.
Finally, as revenues ramp up, we will increasingly see the strong operating leverage of Blackberry’s business model. Already in the first quarter, margins increased nicely with the bump in revenue. Looking into the next few years, we can expect more increases as revenue rises.
The bottom line
If Blackberry stock was once a meme stock, investors can now be confident that it is no longer. In contrast, Blackberry stock is, in fact, a TSX stock that has begun to grow profitably. And the momentum has only just begun. Blackberry’s long-term growth trajectory is driven by the massive connected car market, as well as connected systems in other areas. This growth is highly visible as long-term connectivity trends are going strong. These growth drivers will continue to support Blackberry’s businesses.
So, in closing, I’d like to reiterate – Blackberry is a TSX stock to buy right now. Investing $1,000 into Blackberry stock today would give you 60 shares and exposure to one of the most lucrative trends today.
