BlackBerry Limited (BB - Get Rating) provides intelligent security software and services to enterprises and governments worldwide. Its products and services are structured in three groups: BlackBerry Spark, BlackBerry IoT Solutions, and BlackBerry IP Licensing.

BB is a leader in providing endpoint security management, encryption, and embedded systems solutions. The  company secures more than 500 million endpoints, including more than 175 million cars on the road today.

BB has entered into a strategic partnerships with Amazon, Inc. (AMZN), China’s Xpeng Motors (XPEV) and Baidu (BIDU) over the past year. These have helped the stock gain 187.1% during that period. This impressive performance combined with several other factors has helped BB earn a “Strong Buy” rating in our proprietary rating system.

Here is how our proprietary POWR Ratings system evaluates BB:

Trade Grade: A

BB is currently trading above its 50-day and 200-day moving averages of $8.91 and $5.99, respectively, indicating that the stock is in an uptrend. In fact, the stock’s 287.7% gains over the past three months reflect  solid short-term bullishness.

Despite  coronavirus-pandemic-induced restrictions, BB reported solid financial results in the fiscal third quarter (ended November 30, 2020). The company reported non-GAAP total revenues of $224 million, with non-GAAP EPS of $0.02 in the third quarter.

In December , BB entered  a multi-year, global agreement with Amazon Web Services, Inc. (AWS) in which  AWS will develop and market BB’s Intelligent Vehicle Data Platform, IVY. The collaboration will provide automakers with the insights, capabilities, and speed they need to thrive in an increasingly connected world. The arrangement  should  help BB help create new applications, services, and opportunities without compromising on safety, security, or customer privacy.

A couple of days ago, BB announced an expansion of its strategic partnership with Baidu to provide its industry-leading certified operating system to power Baidu’s autonomous driving open platform, ‘Apollo’. The partnership will help BB develop and deploy leading edge autonomous driving and connected vehicle technologies to meet the security requirements of the automotive industry.

Buy & Hold Grade: B

In terms of proximity to its 52-week high, which is a key factor that our Buy & Hold Grade considers , BB is well-positioned. The stock is currently trading 9.2% below its 52-week high of $20.83.

The company has gained 169.5% over the past five years. This can be attributed primarily to the company’s significant cyber security partnerships and go-to-market strategy, including strong channel partnerships.

Peer Grade: A

BB is currently ranked #3  of 25 stocks in the Telecom – Domestic Industry. Other popular stocks in this industry are Verizon Communications Inc. (VZ), AT&T Inc. (T) and T-Mobile US, Inc. (TMUS).

TMUS has gained 61.1% over the past year, while VZ and T have declined 6.2% and 22.7% respectively, over this period. In comparison, BB has gained 187.1% over this period.

Industry Rank: B

The Telecom – Domestic Industry is ranked #25 of the 123 StockNews.com industries. The companies in this industry are focused on providing voice, data, text, sound, and video transmission services through wired, wireless, or satellite networks.

COVID-19 has been a force of change and a catalyst for innovation in  the telecom industry. Organizations moved online almost overnight early in the pandemic and had to rely heavily on connectivity to make remote organizational structures possible. The telecom industry rose to the challenge, cementing its position among its peers during this trying phase. Moreover, the ongoing 5G transformation has further improved the industry’s prospects as the whole world is now  looking to re-invent smart farming, robotics, telemedicine, and automated vehicles.

Overall POWR Rating: A (Strong Buy)

BB is rated “Strong Buy” due to its impressive past performance and short-term bullishness, as determined by the four components of our overall POWR Rating.

Bottom Line

Despite soaring more than 300% over the past six months, BB has the potential to grow further based on its continued business growth, favorable earnings and revenue outlook, and price momentum.

Analyst sentiment, which gives a good sense of a stock’s future price movement, is good for BB. It has an average broker rating of 2.12, indicating favorable analyst sentiment. A consensus EPS estimate of $0.18 for its fiscal 2020 (ending February 2021) indicates a 38.5% rise from the previous year. The company has an impressive earnings surprise history; it beat the Street EPS estimates in each of the trailing four quarters. This outlook, we believe, should keep BB’s price momentum alive in the near term.

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BB shares fell $2.23 (-8.88%) in after-hours trading Wednesday. Year-to-date, BB has gained 278.58%, versus a 0.14% rise in the benchmark S&P 500 index during the same period.

About the Author: Rishab Dugar

Rishab is a financial journalist and investment analyst. His investment approach is to focus on quality stocks, trading at low prices, with business models that he readily understands. More...

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