BlackBerry (BB) - Get Report lost ground Tuesday after the tech-security and software company was downgraded to sell from hold by a Canaccord Genuity analyst, who raised concern about volatility in the shares.
Shares of the Waterloo, Ontario, company at last check were down 6.7% to $12.10.
Analyst T. Michael Walkley, who raised his price target on BlackBerry to $10 a share from $8, said in a note to investors that the company's software security product portfolio is improving.
The analyst also said the company has made strides integrating the software firm Cylance, which it purchased in 2018 for $1.4 billion, and creating a "compelling" cybersecurity platform.
However, Walkley said, with the volatility in the shares from a "targeted short squeeze," the share price is above his increased price target.
The company received a sharp boost from retail traders recently and had been heavily mentioned on online message boards such as Reddit, where companies like GameStop (GME) - Get Report and Express (EXPR) - Get Report were also featured.
Walkley said that even though the stock has pulled back sharply from its "Reddit driven rally" to its January high, "our analysis leads us to believe the shares are still overvalued."
"While we believe management has created a cogent long-term strategy and the business is turning the corner towards stronger trends," the analyst said, "we await more proof in execution on the new product roadmap, evidence of cross-selling opportunities emerging, growing overall software and services revenue, and the potential for upside to our estimates before becoming more constructive on the shares."
Last month, BlackBerry unveiled an expanded partnership with Baidu (BIDU) - Get Report to continue working on automated high-definition mapping software that the Chinese internet search engine uses in its autonomous driving technology.