BlackBerry has been struggling to turn things around, and analysts continue to offer suggestions, like a sale of some or now even all of the business. The case for dumping the devices division has been made several times, and it’s easy to see why because it is the devices division that’s dragging the rest of the company down. Also BlackBerry management has said they want to transition the company into a software-focused model.

BlackBerry Ltd Buyout Would Be Better For Shareholders [REPORT]

But what if BlackBerry could sell itself off entirely? In a report dated April 6, Trefis analysts make the case for why shareholders would be better off if a white knight came along and purchased the beleaguered smartphone maker.

BlackBerry tries to grow earnings

BlackBerry CEO John Chen has remained optimistic regarding the company’s future, but investors clearly aren’t convinced, and neither are most analysts. The Trefis team calls the smartphone maker’s recent operational progress “reasonably encouraging,” although they note that it will be very difficult to start growing earnings in the near term.

After all, the company will soon run out of costs it can cut, and in the meantime, it will still have to deal with issues like halting the steady revenue decline it has been seeing over the last several quarters. Analysts are largely convinced that over the next couple of fiscal years, BlackBerry will continue to see losses per share rather than earnings. The company’s long term future also remains unclear.

What about BlackBerry’s assets?

While BlackBerry continues to struggle on its own, Trefis analysts note that it does still have several assets, even though it remains in the red. For example, BlackBerry’s intellectual property is quite valuable, and it holds valuable software and has managed to retain plenty of engineering talent in spite of its difficulties. Any one of these assets could be more valuable to a company that isn’t struggling to stay afloat.

As a result, Trefis analysts consider the challenges BlackBerry faces, why shareholders would benefit from an acquisition and why acquirers might want the company’s assets.

Why BlackBerry will keep struggling in earnings

Previously, BlackBerry enjoyed service revenue which came with high margins, but revenue from services has been declining rapidly even though it still made up nearly half of the total fourth quarter revenue. Management wants to move from a services revenue company to a software revenue company, but this looks unlikely. The software segment houses BlackBerry Enterprise Server.

The company has said it will more than double its software revenue to reach approximately $600 million in the 2016 fiscal year, but competition in mobility management continues to heat up. Also BlackBerry has been slow in ramping up monetization of its BES EZ Pass program.

Citigroup estimates that only about a third of BlackBerry’s EZ Pass subscribers have been converted into paying subscribers, which doesn’t bode well for the company’s software revenue. As the Trefis team notes also, enterprise mobility management remains a small niche in the overall mobile space with less than $1.5 billion last year even though it is growing fairly quickly. But even if BlackBerry had captured all of that $1.5 billion, that’s still less than half of the $3.3 billion the company recorded in total revenue for 2015.

Also the devices segment keeps missing expectations, and Trefis analysts don’t expect the Passport or Classic to be home runs either. As a result, they don’t really see anywhere for BlackBerry to go in order to grow its earnings.

Why might an acquisition make sense?

Shares of BlackBerry have been volatile over the last few years, especially whenever there’s even a tiny hint that management is considering selling the company. Investors were excited when there was a chance Fairfax might have bought it in 2013. Rumors about Samsung acquiring BlackBerry earlier this year also provided an upward catalyst.

However, the Trefis team suggests that selling the company now might make more sense than it did in the past. For one thing, BlackBerry’s financial position is better, making it more attractive to potential acquirers. The company enjoyed cash flow of $76 million in the fourth quarter and reported $3.27 billion in cash on its balance sheet. As a result, BlackBerry may have a leg to stand on if it did enter into negotiations with a potential buyer.

The analysts also say BlackBerry’s current portfolio is “heavily geared towards currently hot trends” like the Internet of Things and secure communications. This would increase its attractiveness to potential suitors.

Investors would be better off if BlackBerry was acquired

BlackBerry shareholders have watched the company’s stock remain range-bound between $8 and $11 per share. For this reason, Trefis analysts think shareholders would be better off with a sizeable premium that might come if an acquirer comes along. This would also remove the uncertainties about BlackBerry’s future and also the risks associated with that future, if there is one.

Some of the assets they see as being attractive to potential buyers include BlackBerry’s portfolio of approximately 44,000 wireless patents. These patents basic patents lie in an area of the mobile space in which lawsuits “have been abundant.” The portfolio’s net book value was approximately $1.43 billion last August, but the Trefis team suggests that their market value might be “significantly higher.”

BlackBerry is also known for its mobile security technology and patents, which again could attract a suitor for the company. Management has been focused on building partnerships in mobile security, but selling the company off could be more lucrative, and a larger, successful company may be in a better position to benefit from buying BlackBerry’s mobile security tech.

The company’s QNX operating system and Internet of Things assets could also be very attractive to many buyers, as numerous companies have sunk significant chunks of cash into developing such assets. Snapping up BlackBerry’s advances in these areas could give an acquirer a leg up in what’s arguably the hottest segment of technology right now.

As of this writing, shares of BlackBerry were up 0.64% to $9.40 per share at the NASDAQ.