BlackBerry has seen its share of struggles over the past several years. Once the leader of the mobile market, BlackBerry was once the go-to brand for corporate professionals and for people with work on the go. However, BlackBerry was unable to compete with Android and Apple and once they entered the market, BlackBerry began to wither and slowly die. Several years later, BlackBerry has set its focus on top level security services for corporate devices. For instance, BlackBerry just this week unveiled its latest venture back into the tablet market with a tablet that boasts significant security upgrades. However, that was not enough for analysts to get behind the stock just before next week’s earnings announcement.
Price target set at $10 by Imperial Capital
Analysts at Imperial Capital took to a press release to preview next week’s BlackBerry earnings call. Imperial estimates that BlackBerry will see earnings per share of -$0.05 per share on revenue of $753 million for the quarter. Additionally, Imperial Capital highlighted its price target at $10 due to a “sum-of-the-parts valuation”, which takes into account $1.25 billion convertible debt for $10 a share. Lastly, Imperial Capital significantly rebuke’s management’s belief that BlackBerry will be able to double its software revenue to $500 million by full year 2016 citing the fact that BlackBerry has yet to reel in any big name customers. Goldman Sachs Group analysts also decided to downgrade shares of BlackBerry earlier this month from a “neutral” rating to a “sell” rating.
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BlackBerry earnings will be key to outlook for rest of 2015
Analysts are not giving BlackBerry much of a chance, but there certainly is not a whole lot to go off of when it comes to BlackBerry. The slimmed down company is continuing to try to find its stride after turning the business’s focus to corporate software and security. Ultimately, next week’s earning will give a lot for investors to go off of and will help determine the outlook for BlackBerry in 2015.
Next week is pretty big for BlackBerry in the sense that it has the opportunity to prove analysts wrong and prove that there is still more gas left in the tank. However, failure to come above Imperial Capital’s estimates will only give analysts more strength in their thesis that BBRY is a sinking ship and cannot be saved.