BlackBerry Earnings Preview: Can Shares Continue Higher Following Q4 Results?

BlackBerry Ltd (NASDAQ: BBRY) is scheduled to announce its fourth quarter financial results before Friday's market open. Let’'s take a look into what some of the top analysts in Wall Street are saying about the company.

According to Estimize, the Street is modeling a consensus net loss of $(0.10) per share on revenue of $559.74 million, down from EPS of $0.04 and sales of $660 million posted a year ago.

TD Securities

Analysts at TD Securities issued a few weeks ago a Buy rating and $9.00 price target on shares, arguing the stock was undervalued due to the increasing software sales, “significant optionality with respect to the hardware business,” the monetization of the company’s patents, and its net cash positions.

Raymond James

Earlier this week, Raymond James’ Steven Li issued a Market Perform and $8.00 price target. The firm is modeling sequentially flattish revenues for the quarter (maybe up 2 percent), as Hardware (full PRIV contribution and wider roll-out) and Software (full contribution from Good acquisition) offset the ongoing decline of SAF and the lack of IP licensing revenues.

“BES software saw improved traction in its most recent quarter, its organic growth has not impressed us thus far, keeping us on the sideline,” the note concluded.

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Morgan Stanley

Morgan Stanley envisions a net loss of $(0.13) per share on revenue of $569 million. The analysts noted better availability and demand of the Priv device points toward an uptick, but the path to a breakeven remains questionable.

The firm maintains an Equal-Weight rating and $7.00 price target on the stock.

Credit Suisse

On Wednesday, analysts issued an Underperform rating and $6.00 price target on shares. For the fourth quarter, they project a net loss of $(0.09) per share on revenue of $558.9 million.

The report pointed out, “while the company may currently be showing possible signs of a recovery, much of this strength can be attributed to IP licensing sales of $53mn last quarter, which was structured with an upfront payment.”

Goldman Sachs

Goldman analysts expect “weaker revenues and continued lack of profitability” and have thus modeled a fourth quarter net loss of $(0.06) on revenue of $556 million.

“In addition to the ongoing share loss for BlackBerry’s device business, we see incremental near-term risks from its outsized exposure to the financial vertical, which is facing significant headwinds in the calendar first quarter of the year,” the note highlighted. The firm maintains a Sell rating and $6.00 price target.

JPMorgan

JPMorgan issued a Neutral rating for the stock on Thursday. The experts remain cautious as they head into the company’s earnings call, mainly on the back of concerns over declining revenue.

“While the Software segment appears to be gaining momentum, we note that significant execution risks persist,” the analysts pointed out. “In addition, IP revenue appears lumpy, the Smartphone business seems to be losing momentum and the Services decline continues to accelerate.” Moreover, the substantial cuts to R&D seen recently provide an extra source of concern.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.