BlackBerry will need more than an iconic name to impress investors
BlackBerry (NYSE: BB) A day after the stock reported mixed earnings. The company has been surprised by the positive 6 cents per share as opposed to the negative one cents per share expected by analysts.
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And the revenue miss wasn’t terrible. The real issue for the company was its forward guidance. In 2021, the company received substantial revenue from the sale of patent licensing from its successor mobile device business. That revenue has been calculated for the most part and this means that the company will have to rely on other business units to pick the slack in order to move forward.
That’s the problem.
BlackBerry posted $ 749 million in revenue in 2021. Which was lower than the previous year. And the following year, management is guiding the high end for 705 million. That makes for some difficult math.
Going forward the company will earn its income primarily through its cyber security products and its IoT products. At its core, BlackBerry has always been about cyber security. However, in the company’s earnings call, it said it expects revenue from the cyber sector to flatten in 2022.
Meaningful income years away
This leaves the company’s IoT solutions. And it brings our company’s scalable cloud-connected software program to IVY. IVY stands for Intelligent Vehicle Data Platform. It has the potential to provide EV manufacturers with a universal solution that allows them to collect data from multiple sensors in a secure, consistent way.
BlackBerry claims IvyK is a win-win for consumers and EV makers. Customers will get an enhanced driving experience. And manufacturers will benefit from lower costs, more efficient operations, and higher revenue. This is especially true of autonomous vehicles. And has a partnership with BlackBerry Microsoft (NASDAQ: MSFT) And Amazon (Nasdaq: AMZN). However, that future is a few years away.
BB Stock is a story for another day
In 2021, on two separate occasions, BB Stock Mem caught up with the stock movement. It looked like a weird version of this band in stock. However, the name of the company refers to an iconic brand. Perhaps some retail investors were lost in nostalgia.
And the stock was cheap. A recognized name and a cheap price have gone a long way. I wrote about BlackBerry several times in 2021 and I have always warned investors that meme stock mania can distract them from what is actually happening with BlackBerry.
I’m rooting for BlackBerry myself. It is a company that is always involved in security. And it could play a role in cyber security. It can also play a role in autonomous vehicles.
My problem with BlackBerry is that the company relies on many factors beyond its control. At the moment this includes semiconductor chips, supply chain problems and automated production schedules. And that makes it hard to see a reason to buy stock right now.
Is there a long-term story here? I still believe there can be. But at the moment, the company expects full-year revenue to be lower than in 2021. And that will put pressure on already high valuations. In short, BlackBerry is not a meme stock, unfortunately it is not even bought at this time.
