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BlackBerry Stock: 3 Growth Catalysts for 2022

BlackBerry’s stock has been struggling during the past month and is currently down 20%. Now, valued at $9 per share, we think it’s a Buy. Here are some of the catalysts that could send BB shares soaring.

Over the years, BlackBerry  (BB) - Get BlackBerry Limited Report has transformed its business. Nearly 10 years ago, it was the market leader in the mobile phone space, beating out even Apple  (AAPL) - Get Apple Inc. Report.

But iOS and Android devices quickly overtook BlackBerry and made its cellphones all but obsolete.

So BlackBerry made some changes. Fast-forward to today, and BlackBerry is one of the world’s top cybersecurity providers. An independent report found that its solutions address more than 96% of all cyberthreats.

But the company’s shares have struggled since hitting a peak in early June. Back then, a meme-stock frenzy pushed BB north of $15 per share.

Currently valued at $9 a share, the Canadian cybersecurity firm has dropped nearly 20% in the last month. Compare that to the S&P 500  (SPY) - Get SPDR S&P 500 ETF Trust Report, which fell only 2% in the same period.

Figure 1: BB vs. SPY performance in a 1-month period.

Figure 1: BB vs. SPY performance in a 1-month period.

However, there are a few catalysts that should drive BB stock upward in 2022. Below, we list some of them.

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BlackBerry catalyst #1: Patent sales

According to CEO John Chen, there’s an 80% chance BlackBerry will finalize the sale of its mobile device, messaging, and wireless patents portfolio this quarter. Specifically, it should happen around Christmas.

BlackBerry hasn’t disclosed the identity of the portfolio’s buyer. And negotiations have taken longer than expected, according to Chen. He added, “Should [the deal] not conclude this quarter, we have other options, including additional interested parties.”

BlackBerry hasn’t officially disclosed the deal numbers yet. But over the years, Wall Street has speculated that the value of the patent portfolio could range from around $1 billion to $1.6 billion.

Although there’s the risk that the sale will end up a disappointment, there’s also the strong possibility investors could be in for a pleasant surprise once Chen and the rest of the management team close a good deal.

BlackBerry catalyst #2: 2022 CES tech conference

On January 5, the Consumer Technology Association will host its annual CES conference (formerly the Consumer Electronics Show). The event, held in Las Vegas, is considered the world’s most influential tech event.

BlackBerry will participate, exhibiting its IVY tech software, alongside other upcoming projects.

BlackBerry IVY is a scalable, cloud-connected software that gives automakers a safe and consistent way to collect vehicle sensor data. IVY was developed through a partnership with Amazon’s  (AMZN) - Get Amazon.com, Inc. Report Web Service (AWS) division.

The software should help automakers reduce costs, improve operations, and drive revenue. And on the consumer side, BlackBerry promises that IVY will enhance the driving experience.

The CES conference should hopefully net BlackBerry some juicy IVY contracts.

From the top down, market analysts forecast the global cybersecurity market to grow to $345 billion by 2026, representing a nearly 10% compound annual growth rate (see below).

Figure 2: Size of the cybersecurity market worldwide from 2021 to 2026.

Figure 2: Size of the cybersecurity market worldwide from 2021 to 2026.

Should BlackBerry remain a relevant player in the space, it stands to benefit from industrywide growth tailwinds.

Our take

There’s a number of reasons why BlackBerry – and its stock – could see huge growth in 2022. We see the case for buying now, when shares are relatively cheap.

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(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting Wall Street Memes)