BlackBerry released its first quarter earnings report on Tuesday, largely missing consensus estimates. Despite the disappointing show, CEO John Chen was “pleased” with the performance, noting that the software segment is showing the expected potential. However, the majority of analysts are neutral on the stock now, with many reiterating their Hold or equivalent rating on the Canadian firm.

BlackBerry Q1: Analysts Stay Neutral

BlackBerry trading at “fair” valuation

Robert W. Baird’s William Power maintained his Neutral rating along with a price target of $9. The analyst noted that BlackBerry posted below consensus numbers for revenue and EPS, but the software numbers beat estimates, and the Canadian firm also raised its software growth guidance for the full year. Power believes that despite the growth potential shown by the company’s software business, BlackBerry’s valuation appears to be “fair,” especially considering “ongoing business and competitive risk.”

S&P Capital IQ‘s Angelo Zino reiterated his Hold rating on the Canadian firm with a price target of $11. Zino increased his operating loss per share estimate for BlackBerry to 12 cents from 7 cents while maintaining his FY17s estimates. The analyst expects revenue to stabilize with help from software and technology licensing growth. For the hardware segment, Zino expects further cost reductions. The analyst notes that positive free cash flow and $3.3 billion in cash will help the Canadian firm explore more software opportunities.

Software revenues the only bright spot

Michael Genovese of MKM Partners reiterated his Neutral rating on the Canadian firm but slashed his price target from $10 to $8.50. The analyst noted that software revenue “looked strong on the surface,” while the company’s organic Enterprise/VAS/BTS-related Software revenue was up 20% to 25% year over year. However, the analyst suggests that on the basis on their analysis, organic Software revenues were “actually flat to slightly down sequentially.” Genovese estimates that for the quarter, more than 50% of the software revenues might have come from time licensing payments from Cisco and one more firm.

Also UBS’ Amitabh Passi reaffirmed his Neutral rating on the firm with a price target of $10. BlackBerry’s gross margin of 50% came in better than expected, compared to the 47% expected by UBS and the consensus of 47.7%, while the operating margin of -1.1% was lower than UBS’s -0.2% but better than the consensus of -1.6%. Passi noted that software revenues helped the company post strong margins.

On Tuesday, BlackBerry shares closed down 4.24% at $8.81, and year to date, the stock is down by almost 20%.