Credit: Shutterstock photoOn Apr 5, we issued an updated research report on BlackBerry LimitedBBRY . Shares of this Waterloo, Ontario-based company gained 16.99% in the last one month, outperforming the Zacks categorized Wireless - Non US industry's gain of 4.10%.
Further upside is expected following the company's impressive bottom-line performance in the fourth quarter of fiscal 2017.
Coming Off a Strong Quarter
BlackBerry reported narrower-than-expected loss in the fiscal fourth quarter. Loss also narrowed on a year-over-year basis. Lower costs boosted the bottom-line performance. The company's guidance for fiscal 2018 is also encouraging. The company expects its software business to either outperform or at least perform at par with the overall market in fiscal 2018. In fact, the company anticipates profitability (on an adjusted basis) and also expects to generate positive free cash flow in fiscal 2018.
Meanwhile, the Zacks Consensus Estimate for fiscal 2018 loss has narrowed by a cent to 6 cents per share over the last seven days.
In order to strengthen its position in the software business, BlackBerry has recently inked multiple deals. The company's newly formed joint venture (JV), PT BB Merah Putih, to license its software and services for the production of handsets for the Indonesian market is also encouraging. Earlier this year, BlackBerry signed a commendable cross-platform deal with Emtek, an entertainment, media and technology power house of Indonesia. The deal with Giuliani Partners to combat cyber threats also raises optimism. The deal with Indian telecom enterprise, Optiemus Infracom Ltd, is another positive.
BlackBerry's deal with leading auto manufacturer Ford Motor Company is again a noteworthy one. The deal will see the expanded use of BlackBerry's QNX and security software at Ford. Notably, the QNX software has been deployed in over 60 million vehicles.
BlackBerry's decision to end all internal hardware development and focus exclusively on software business seems to be paying off. In order to strengthen its position in the software business, the company recently inked a number of deals. It also announced a second device in the DTEK series of Android smartphones called DTEK60 which is equipped with the company's popular security software. Last December, BlackBerry had entered into a deal with TCL to manufacture BlackBerry handsets for a few countries. The company expects its software business to either outperform or be on par with the overall market in fiscal 2018. In fact, the company expects higher profits (on an adjusted basis) and positive free cash flow in fiscal 2018.
In view of these positives, it seems to be the right time to invest in the stock. BlackBerry's Zacks Rank #1 (Strong Buy) seems to suggest the same. You can see the complete list of today's Zacks #1 Rank stocks here .
Other Key Picks
Investors interested in the broader computer and technology sector may also consider TIM Participacoes TSU , Analog Devices ADI and Applied Optoelectronics AAOI , which carry the same rank as BlackBerry.
Shares of TIM Participacoes, Analog Devices and Applied Optoelectronics gained over 37%, 10% and 90%, respectively, on a year-to-date basis.
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Applied Optoelectronics, Inc. (AAOI): Free Stock Analysis Report
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BlackBerry Limited (BBRY): Free Stock Analysis Report
Analog Devices, Inc. (ADI): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
