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BlackBerry Rides on Software Sales, Technology Collaboration

Zacks Equity Research
Updated

On Apr 3, we issued an updated research report on wireless services provider, BlackBerry Limited BB.

Operating as a leading player in the enterprise mobility management, BlackBerry is widely recognized for productivity and security innovations. The company delivers one of the most secure end-to-end mobile enterprise solutions in the market through a broad portfolio of products and services. It offers an end-to-end software and services platform for the Enterprise of Things, which includes computers, vehicles, sensors, equipment and other connected endpoints within the enterprise that communicate with each other to enable smart business processes.

The company leverages its extensive technology portfolio to extend the best-in-class security and reliability features. These include a unified endpoint management solution that provides comprehensive multiplatform device, application and content management with integrated security and connectivity, embedded systems, enterprise applications and related services. With a holistic growth model, focusing both on organic and inorganic investments, BlackBerry aims to extend its market leadership in the enterprise mobility segment.

With the continued the digital transformation of enterprises, the number and scope of connected devices has also expanded manifold to include other endpoints such as vehicles. With the rapid growth of this network of connected endpoints, often referred to as the IoT (Internet of Things), security has become increasingly important to thwart data theft. This landscape has created opportunities for secure management solutions, embedded systems, communications platforms, enterprise applications, networks and analytic tools, as well as for related services that help enterprises to enhance data security and user privacy. BlackBerry has created a niche market for itself in this domain and seeks to strengthen its position with innovative safety features.

Moreover, the company has inked a strategic partnership with Baidu in January 2018 on a self-driving car project. The deal allows Baidu to use its QNX Hypervisor 2.0 software, which is designed for complex in-vehicle computer systems in its open-source self-driving platform, Apollo. BlackBerry has also entered into a multi-year agreement with Jaguar Land Rover to collaborate and develop technology for the latter’s next-generation vehicles. As part of the agreement, BlackBerry will license its QNX and Certicom technology to Jaguar Land Rover, as well as assign a team of engineers to support the development of new Electronic Control Unit modules. These technological collaborations are likely to boost its leading position in the market.

With a diligent execution of operational plans, BlackBerry has outperformed the industry with an average return of 32.9% in the past year against a decline of 4% for the latter.



Robust software sales are aiding BlackBerry immensely while growth in its cybersecurity business is a huge positive. The company has offered bullish outlook for software and service revenues for fiscal 2019, which are likely to rise in double digits.

BlackBerry sports a Zacks Rank #1 (Strong Buy). Other stocks in the industry worth mentioning include Ceragon Networks Ltd. CRNT, NTT DOCOMO, INC. DCM and Orange S.A. ORAN, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Ceragon Networks delivered an average positive earnings surprise of 8.3% in the trailing four quarters.

NTT DOCOMO has a long-term earnings growth expectation of 4.9%.

Orange has a long-term earnings growth expectation of 25.9%.

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NTT DOCOMO, Inc (DCM) : Free Stock Analysis Report
 
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