BlackBerry Ltd Attractive For Investors OK With Volatility: Analyst

BlackBerryjieyirain / Pixabay

BlackBerry is an interesting stock to watch, according to Colin Gillis, a senior technology analyst at BCG Partners. Gillis suggests that investors who keep calm during the choppy session of the stock can keep it on their watch list.

A year of reconciliation

Talking on CNBC‘s Tech Bet, Gillis said, “What this year has all been about is stopping the bleeding, getting the company back on stable footing and return to cash flow positive.”

For fiscal 2015, the company is sitting on cash reserves of $3 billion and turned cash flow positive on a declining revenue basis. Gillis is expecting headwinds in the revenue environment but notes that the company is on the right track to build on its software assets.

“You have to have the stomach for the volatility that’s going to be associated with a company that’s in transition,’ Gillis told.

The analyst feels that BlackBerry CEO John Chen is aiming at some big targets in 2016, including turning around the company, focusing on the enterprise software model and ditching the legacy model. Gillis said he likes the management team at BlackBerry. BlackBerry has been assigned a Buy rating with a price target suggesting a 29% upside potential from the current levels.

BlackBerry short interest up

Recent data suggests that there has been an increase in short interest for BlackBerry. On March 13, short interest for the smartphone maker totaled 95.6 million shares, as compared to 88. million shares on Feb. 27. This represents an increase of 8%.

The Waterloo, Ontario-based company posted a surprise profit last quarter. Chen said at the Mobile World Congress that the company will continue to increase positive cash flow. Chen mentioned that the company will launch four handsets this year, including the Leap, which is a five-inch, affordable all-touch model, and hinting at a curved screen model with a keyboard that will be launched later this year.

BlackBerry released its latest earnings report this morning, posting a surprise profit of 4 cents per share compared to the expectation of losses of 4 cents per share. Sales were short of expectations, coming in at $660 million. Shares of the smartphone maker were halted at the time of the earnings report pending some big news.

On Thursday, BlackBerry shares closed up 0.22%.

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About the Author

Aman Jain
Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at

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