BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) shares witnessed a large spike in short interest during the month of September. As of Sept. 30, short interest in the company totaled to more than 92.2 million shares, which is an increase of 2.4% from the Sept. 15 total of 90.1 million shares. The days-to-cover ratio, on the basis of the average daily trading volume of about 20.6 million shares, stands at 4.5 days. Presently, 18.9% of the company’s shares are sold short.
Consensus rating of Hold
Many analysts have given their verdict on the stock recently. In a research note on Monday, Imperial Capital analysts initiated coverage on BlackBerry with an In-line rating and a $10 price target. Recently, ING Group analysts also initiated coverage on the Canadian firm. In a research note on Sept. 30, Credit Suisse analysts raised the price target on BlackBerry to $6 and assigned an Underperform rating to the stock.
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Overall, six analysts have issued a Sell rating; 17 have rated the stock as a Hold, while two have assigned a Buy rating to the stock. Presently, BlackBerry has a consensus rating of Hold and an average price target of $8.84 per share.
BlackBerry financial position stabilizes
Under the leadership of CEO John Chen, BlackBerry has made significant turnaround efforts. For the second quarter, the company posted a loss of 2 cents a share against the consensus estimate of 15 cents a share loss. Chen, in an effort to diversify the company’s risks, has inked deals with Foxconn Technology and Wistron Corporation.
In a research report, Imperial Capital analyst Michael Kim noted that the company’s financial position has been stabilizing, but the hardware and service businesses are still a concern. For the last reported quarter, the company’s revenues declined 42% year over year to $916 million. Hardware revenue was down 45%, while services revenue registered a 42% fall. For the latest quarter, software revenue was up 2%, but in total, the business just accounts for 8% of its total sales.
Imperial Capital expects the Canadian firm to continue offering full touchscreen smartphones; however, the analyst believes that there are slim chances to differentiate one’s offering in the competitive industry. So the most effective strategy for BlackBerry will be to target its most loyal users instead of new ones, he believes.
On Thursday, BlackBerry shares were down 1.2% to $9.10, while year to date, shares are up by over 25%.