BlackBerry shares are rising post the company’s third quarter results, which were higher than the company’s expectations but substantially lower than consensus estimates. Unsurprisingly, the mixed results got a mixed response from analysts at TD Securities and Morgan Stanley, who gave contrasting views on the Canadian company’s outlook..

BlackBerry Ltd Attracts Mixed Views From Analysts Post-Earnings

Smartphone sales less significant

Analyst Scott Penner of TD Securities upgraded Blackberry from Hold to Buy. According to Penner, the drop in revenue was the outcome of lower-than-expected average selling prices for the company’s devices. The analysts noted that the Waterloo, Ontario-based company is shifting its focus from smartphones to software and services. BlackBerry is making and selling devices so as to later offer its software and services, thus making its device sales less significant.

Penner, who assigned a $13 price target to BlackBerry, noted that the company is offering “compelling new services” and increasing the consumer base of its software and services should increase its profitability. The analyst also said increasing revenue will not be a cakewalk for BlackBerry.

Bearish take on BlackBerry

On the other hand, Morgan Stanley analyst James Faucette holds a very different view, noting comments from BlackBerry CEO John Chen, who said it will take six to nine months to convince enterprise users to adopt their software. The analyst noted that the Canadian smartphone maker has still not convinced its EZPass license holders to convert to paying customers. Under the program, companies have made free reservations to buy BlackBerry’s software starting Feb. 1, 2015.

Faucette believes Chen’s comments hint that software revenue will not start increasing until the second half of fiscal 2016, making the target of $500 million in software revenue in fiscal 2016 impractical. Faucette maintained his Underweight rating on the Canadian firm with a price target of $7 per share.

Last week BlackBerry reported adjusted earnings for the September-November quarter at $6 million or 1 cent per share, which was more than the 5 cent loss estimate of analysts, according to FactSet. Revenue came in at $793 for the third quarter, below the analysts’ estimates of $1 billion.

During the earnings call, Chen predicted: “Sometime in FY 2016 we’ll turn profitable, and our plan is once we turn profitable, we’ll sustain it.”