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Here Is Why BlackBerry’s Earnings May Boost The Stock

BlackBerry will report fiscal third quarter earnings on December 21. Here are the main catalysts that could push the stock higher after earnings.

BlackBerry’s  (BB) - Get BlackBerry Limited Report earnings day is just around the corner. On December 21, after the closing bell, the cybersecurity company will release its fiscal third quarter results.

This could be an opportunity for BB stock to find its way higher once again. Shares have just dipped below $9 for the first time since right before their May-to-June 2021 rally.

Figure 1: BlackBerry company logo.

Figure 1: BlackBerry company logo.

Investors hoping to witness BlackBerry stock climb from here could see the earnings report as a potential catalyst. We discuss why this important day might propel BB stock higher soon.

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BlackBerry: fiscal Q3 earnings preview

According to Seeking Alpha, Wall Street expects to see BlackBerry post revenue growth of just 1% this time. If estimates are proven accurate, this will be BlackBerry’s lowest reported EPS since 2017. At the same time, this should also be the last quarter of more pronounced net losses over the next year at least. See trend below.

Figure 2: BlackBerry's EPS surprise & estimates by quarter.

Figure 2: BlackBerry's EPS surprise & estimates by quarter.

Here are some interesting questions to keep in mind on earnings day:

  • Will BlackBerry finalize its patent sales? If so, what will be the price tag?
  • Will the Cyber Security unit be able to deliver strong sequential revenue growth?
  • Should strong performance from IoT (internet-of-things) continue to offset global chip shortage pressures, which are likely to persist?
  • Will BlackBerry IVY show progress in scaling new contracts?
  • Should the company’s guidance for FQ4 and FY23 come in aligned with estimates?
  • Will BlackBerry QNX continue to be a winner among the hyped electric vehicle makers?

Catalysts ahead

As mentioned above, one of the top catalysts to keep an eye on is BlackBerry’s mobile device, messaging, and wireless patent sale. According to CEO John Chen, there is an 80% chance that the deal will go through this quarter — by Christmas, more specifically.

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

Beyond patents, updates on the automotive space could drive (pun intended) positive market reaction. BlackBerry is exposed to the white-hot electric vehicle industry primarily through its IVY software, developed in partnership with Amazon Web Services, and QNX technology.

Wall Street Meme’s take

Last quarter, BlackBerry warned that it would probably face headwinds for at least the next two quarters, especially given the global chip shortage. Since then, BB stock dipped 10% and EPS estimates for fiscal 2022 declined by around 17 cents. Therefore, expectations ahead of the upcoming earnings day seem de-risked enough.

This could be a good setup to own shares ahead of earnings, when the company’s equity is worth less than $5 billion. This is true for investors who see EV and cybersecurity as opportunities and potential drivers of shareholder value over the longer haul.

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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)