Is BlackBerry Worth a Look as a Long-Term Investment?

BlackBerry (BB) started as Research in Motion in 1984, and eventually rose to become the world's largest smartphone manufacturer. That is, until Apple's (AAPL) iPhone splashed onto the scene.

Those days are now long gone, and Blackberry has made the transition to a pure-play software company. Based in Canada, BlackBerry had largely flown under the radar.

In a surprising twist, BB stock became a focal point for aggressive meme stock investors in early 2021. The software stock soared from around $7.50 at the start of the year to nearly $30 per share during an impressive parabolic move, which saw multiple highly shorted stocks surge.

Since then, let's just say the momentum has died down. BlackBerry stock still trades in the double-digit range at the time of writing. However, this stock is finally being viewed according to its fundamentals.

Right now, based on where BB stock sits, I'm cautiously bullish on this stock. Let's take a look at some of the pros and cons. (See BlackBerry stock charts on TipRanks)

Developing Game-Changing Cloud-Connected Software 

Starting with the bull perspective, BlackBerry's underlying business model provides a relatively strong base from which traders can build an investment thesis.

Its focus on security has allowed BlackBerry to build a nice niche around its business. Among the key technologies BlackBerry is building out is the company's new cutting-edge cloud software, called BlackBerry IVY. 

Amazon Web Services (AWS) (AMZN) and BlackBerry have partnered to develop BlackBerry IVY. Indeed, this is a partnership many investors are looking to as a potential growth driver for both companies. BlackBerry IVY allows car makers to use data gathered by sensors within the vehicle to enhance the driving experience for users. Various personalized in-vehicle services are also supported by this software.

Given the attention surrounding the connected vehicle and autonomous driving market, BlackBerry's technology, which supports this growth sector, is certainly one investors should have their eye on. BlackBerry's IVY platform looks to solve many of the issues that have plagued the auto sector, in that it can translate data from various sensors into meaningful insights to improve the driver experience.

Undoubtedly, this announced partnership late last year has been a big catalyst for BB stock. Retail investors buying into this meme stock also played a huge role in the rally BlackBerry saw earlier this year. However, looking at the core growth drivers for BlackBerry, investors must like what they see.

How Could This Partnership Benefit BB Stock?

What's difficult for many investors to do is to separate out the fundamental growth drivers of these meme companies from the market hysteria. Indeed, there's an argument to be made that BB stock could be among the most difficult to assess in this regard.

How much of BlackBerry's rapid rise has been a result of its core growth trajectory shifting is hard to parcel out. That being said, there's some semblance of sanity once again with this company's valuation. On a relative basis, one could now make the argument that BB stock looks somewhat attractive at these levels.

However, taking this key partnership into consideration, there's much to be optimistic about. BlackBerry's IVY platform is built on top of BlackBerry QNX, which is present in over 175 million cars. Along with the impressive moat and customer base AWS boasts, there's an easy argument to be made that some real, long-term growth potential is present in BB stock right now.

What are Analysts Saying about BB Stock?

As per TipRanks' analysts rating consensus, BlackBerry is a Moderate Sell. Out of 5 analyst ratings, there are 2 Hold and 3 Sell recommendations.

The average Blackberry price target is $9.23. Analyst price targets range from a high of $10 per share to a low of $7.57 per share. 

Bottom Line

Sure, BlackBerry has been a real laggard since Q1. This company's stock price has continued to decline, and is now trading back near the $10 level.

However, the risk may be worth it for aggressive growth investors right now. BlackBerry is a company with a strong cybersecurity and software base, that could see impressive growth emanate from this recent partnership.

Right now, much of the discussion among investors relates to the execution risk with this stock. BlackBerry needs to make good on its growth potential.

Disclosure: At the time of publication, Chris MacDonald did not have a position in any of the securities mentioned in this article.

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices or performance.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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