BlackBerry is scheduled to release its next earnings report on Friday before opening bell, and Wall Street is looking for the company to break even on $288.5 million in revenue for the fourth quarter of its fiscal 2017. Investors and analysts are waiting for the company to show signs of real strength in software revenues, although at least one analyst warns that the quality of the company’s fourth-quarter software revenue may have been low.

BlackBerry BBRY earnings

What to expect in BlackBerry’s earnings report

Credit Suisse analyst Kulbinder Garcha expects BlackBerry to report $291.4 million in revenue with a gross margin of 70.3% and earnings per share of 1 cent. In his preview note, he said he “generously” is modeling a 13% increase in software revenues in both fiscal 2018 and fiscal 2019 as service and hardware revenues fade. He sees the potential for long-term revenue of $850 million by fiscal 2019.

He feels that the company’s software portfolio is “average, at best,” noting that it has been built through acquisitions rather than in-house software development. He also questions the quality of some of those acquisitions, particularly Good Technology, so it’s no surprise that he rates BlackBerry at Underperform with a $6 price target.

About that shift toward software…

RBC Capital Markets analyst Paul Treiber is less bearish on BlackBerry with a Sector Perform rating and price target of $7.50 per share. He expects this week’s earnings report to show further progress toward being a software company, as he expects 65% of total revenues to be software. In the previous quarter, 54% of total revenues were software.

In his preview note, he pointed out that in December, the company reiterated its guide for software revenue to jump, calling for a 30% increase year over year in fiscal 2017. This implies at least $180 million in software revenue in the fourth quarter, which would represent a 16% year over year increase. He feels that investor confidence would be boosted if BlackBerry’s software revenue can break out of the $150 million to $170 million range it’s been stuck in over the last five quarters.

However, he also warns that just like in the third quarter when it reported “company total software & services revenue,” the quality of the fourth quarter software revenue could be low and again include handset or IP licensing or services revenues.

Shares of BlackBerry stock edged lower by as much as 0.85% to $7.03 during regular trading hours on Tuesday on the NASDAQ.