BlackBerry Jumps 48% in a Year: Buy, Sell or Hold the Stock?

BlackBerry Limited BB stock’s newfound momentum is impressive. It has surged 47.8% in the past year, significantly outpacing the Computer Software industry’s, broader Zacks Computer & Technology sector and the S&P 500 composite’s growth of 0.5%, 12.6% and 13.8%, respectively. Blackberry has also outperformed peers within the cybersecurity space, such as Fortinet FTNT and CrowdStrike Holdings, Inc. CRWD, which have gained 41.8% and 5.1%, respectively, over the same time frame. BlackBerry gained 2.5% in the last trading session and is trading 27.6% below its 52-week high of $6.24.Price PerformanceImage Source: Zacks Investment ResearchBB has caught investors’ attention for some time now as management is doubling down on strategic maneuvers to drive the top line and boost profitability. In the last reported quarter, buoyed by cost-cutting, adjusted EBITDA (from continuing and discontinued operations) of $23 million rose from $18 million in the year-ago quarter. The company had expected adjusted EBITDA to be $0-$10 million.Image Source: Zacks Investment ResearchAfter this meteoric growth in the past year, investors are likely contemplating whether to capitalize on gains or maintain a long-term investment stance. BB’s Growth FactorsThe sale of underperforming operations and efforts to streamline core business bodes well. BlackBerry recently completed the sale of its Cylance endpoint security assets to Arctic Wolf in a deal valued at roughly $160 million. With the sale of this underperforming unit, BB is now committed to its Secure Communications business, which includes BlackBerry UEM, BlackBerry AtHoc and BlackBerry SecuSUITE. These solutions will remain central to the company's operations as they strengthen its foothold in the secure communications space. Owing to the Cylance sale, BB announced that it is “standing down” all previously provided guidance related to cybersecurity and the overall guidance for the company. It is now providing guidance only for the new Secure Communications division. It will provide revised guidance for fiscal 2026 for both the Secure Communications division and total revenues for the fourth quarter of fiscal 2025. For the Secure Communications division, revenues are expected to be in the range of $267-$271 million.BB has renamed its IoT division to "QNX," driven by valuable feedback from customers, partners, employees and stakeholders. The idea behind this rebrandingis aimed at enhancing recognition and reinforcing its leadership in the automotive and embedded industries and fueling the development of next-generation software-defined vehicles (SDVs) and mission-critical applications.QNX’s revamped brand identity includes a new logo, website and visual design, reflecting its focus on performance-driven, future-focused solutions.Image Source: Zacks Investment ResearchEarlier in January 2025, BlackBerry also unveiled the QNX Cabin, a cutting-edge solution and multiple partnerships, including one with Microsoft Corporation MSFT.QNX and Microsoft partnered to aid automakers in building, validating and refining software within the cloud to power the evolution of SDVs. The partnership will bring the QNX Software Development Platform 8.0 to Microsoft Azure, offering automakers a comprehensive cloud-based environment to accelerate innovation while reducing development risks. Also, QNX and Microsoft plan to extend their collaboration to include the QNX Hypervisor and the QNX Cabin.Apart from this, QNX, along with Vector and TTTech Auto, has announced a multi-year global collaboration to develop a foundational vehicle software platform. The initiative aims to minimize the complexity and costs of software integration.Last month, BlackBerry’s QNX unit and Pi Square Technologies announced a multi-year plan to train thousands of software engineers in India to meet the increasing global demand for skilled embedded systems developers.BB’s Bullish Technical Indicators & Attractive ValuationBB stock is trading at a discount, with a trailing 12-month price/book multiple of 3.72 compared with the industry’s multiple of 7.71.Image Source: Zacks Investment ResearchTechnical indicators are also supporting its strong performance. The stock is trading above its 100-day moving averages, indicating upward momentum and price stability. This technical strength reflects positive market perception and growth prospects.BB Faces Few ChallengesThe automotive industry is highly cyclical and has been affected by broader economic conditions, including supply-chain disruptions and fluctuating consumer demand. Significant delays in the ramp-up of automaker software development programs continue to remain an overhang on IoT revenues in the near term. The company had earlier noted that these delays have extended QNX development cycles and have an “even greater impact” on IVY. This can significantly impact the IoT segment, which has significant exposure to the auto vertical.BlackBerry faces increasing competitive pressures in both IoT and cybersecurity businesses. High technological obsolescence is a challenge for the company, increasing its operating costs for continuous research and development activities to introduce new products and fend off competition.Here’s Why BB is a Hold for NowThough the company's strategic pivot toward high-margin areas, such as IoT and Secure Communications, augurs well, there are several risks that could put downward pressure on the stock price. Its heavy reliance on cost-cutting measures to drive EBITDA, exposure to volatile markets like automotive, and stiff competition in cybersecurity space remain concerns.Given these factors, investors should exercise caution and wait for a more favorable entry point. Investors holding BB stock should closely monitor how BlackBerry executes its strategic priorities in the coming quarters.BB currently carries a Zacks Rank #3 (Hold). 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(FTNT): Free Stock Analysis Report BlackBerry Limited (BB): Free Stock Analysis Report CrowdStrike (CRWD): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks