By Jordan Faigen
BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB)’s deal with Amazon might be stealing the headlines, but don’t forget that the company also just reported its first quarter results on Thursday.
BlackBerry in the News
The ExodusPoint Partners International Fund returned 0.36% for May, bringing its year-to-date return to 3.31% in a year that's been particularly challenging for most hedge funds, pushing many into the red. Macroeconomic factors continued to weigh on the market, resulting in significant intra-month volatility for May, although risk assets generally ended the month flat. Macro Read More
BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) reported its fiscal first quarter results on Thursday. The company revealed a 1% drop in first quarter revenue from the last quarter, bringing in $10 million short of the previous quarter’s $976 million. BlackBerry also posted GAAP net income for the first quarter of $23 million, or $0.04 earnings per share. But before the numbers were posted, analysts were viewing the first quarter as a transitional quarter for the company in anticipation of its BES12.0 launch later this year in November.
A Financial Expert’s Perspective
Before the company released its latest results, Evercore analyst Mark McKechnie recommended SELL BlackBerry, exercising caution. While McKechnie is encouraged by the BlackBerry’s CEO John Chen’s efforts in turning the company around, McKechnie noted, “He can’t address everything at once, and what he has done to date, I’ve been impressed with, but I think he’s late.” McKechnie is looking for the company to return to cash flow positive by the end of this fiscal year, but he will have to wait and see. McKechnie has recommended BlackBerry 25 times, earning a +7.8% average return.
McKechnie’s Past BlackBerry Recommendations
In this week’s Flashback Friday, we take a look at McKechnie’s BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) recommendations. These successful recommendations have helped him earn an +18.4% average return per recommendation and an overall 63% success rate recommending stocks.
Back in August of 2010, when BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) was known as Research in Motion, McKechnie recommended a BUY rating. McKechnie was pleased with the response to the Torch phone, noting, “Our checks reveal that many stores had sold around half of the initial shipments and felt they had good supply available in the channels.” He added, “This seems about in-line with initial feedback from the Bold 2 (launched in October 2009), and also in-line with our expectations going in. We had not expected a consumer phenomenon à la the iPhone 4 or MOT’s Droid X as we view the Torch as largely an upgrade for loyal Blackberry road warriors.” At the time of this recommendation the stock was trading at $50.25 and by the time of his next recommendation in December, the stock was trading at $62.12.
As the stock dropped, McKechnie switched his recommendation to a HOLD rating. In September of 2011, following disappointing Q2 results, McKechnie noted, “RIMM could unlock value by opening its BES server/NOC to iOS and Android. Indeed ~$4.00 of our $4.80 FY13E EPS comes from recurring services and $0.80 from smartphones. When tied to RIMM’s own handsets, however, we view this as a declining asset.” McKechnie also cut his price target at this time from $32 to $23.
In May of 2013, BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) released it’s Z10 handset in the U.S. with AT&T Inc. (NYSE:T). However, even with the buzz of a new release, McKechnie recommended SELL BlackBerry with an $8 price target. He argued, “We expect the stock to remain volatile into the U.S. launch of its Z10/Q10 models and suspect the quarter and outlook will be “OK” on the channel fill with no real end-market demand reads until later in the May quarter.” At the time of this recommendation, the stock was trading at $15.88 and the stock fell to $13.98 in June, the time of McKechnie’s next recommendation.
BlackBerry continues to struggle and McKechnie continues to issue ratings according to their latest developments, or lack thereof.
To see all of McKechnie’s recommendations, visit TipRanks today.
Jordan Faigen covers financial markets and the latest stock market news. She can be reached at Jordan@tipranks.com