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RIM Looks to Break Out

Investors expect a blowout quarter -- and a new 52-week high.

As out of the spotlight as this company can get, BlackBerry maker

Research In Motion


has been doing just fine, thank you.

While its rivals have hogged the spotlight in the last two months --


(AAPL) - Get Apple Inc. Report


iPhone and the furious

takeover chatter surrounding



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have garnered the headlines -- RIM has launched the latest addition to its product family, the BlackBerry 8800, and wrapped up its

internal stock-option accounting investigation..

The launch of the 8800 device, a sophisticated version of its consumer-targeted Pearl, has been a success, say analysts. Combined with continued demand for the Pearl, it should help RIM beat expectations when the company reports fourth-quarter earnings after the bell on Wednesday.

RIM introduced the 8800 in February, added a million email subscribers during the quarter and is expected to have sold about 2.1 million of all its devices in the fourth quarter.

"Our checks suggest that sales of the 8800 are off to a strong start at the Cingular channel," wrote T. Michael Walkley, senior research analyst with Piper Jaffray in his research report, "and Pearl remains one of the top-selling smartphones in North America." Piper Jaffray makes a market in RIM shares.

Analysts polled by Thomson Financial expect RIM to post revenue of $933.2 million, up 66% from the year before, and earnings of 99 cents a share.

But the big questions for RIM-watchers will be whether the company can sustain that kind of growth -- and what that means to a stock that opens Wednesday's session a day after hitting a 52-week closing high of $148.31.

"Fundamentally, it has been a great story, and people are expecting a blowout quarter," says Matt Kelmon, portfolio manager for Kelmoore Investment, which has a position in RIM. "But it trades at a very high multiple -- about 35 times 2008 estimates -- so it is getting a little rich."

But fund managers have been

saying such things about RIM about RIM for more than a few months, and it hasn't stopped the stock from touching new highs. The stock is up about 22% since setting its 2007 low in late January, and it has climbed about 90% in the last 12 months.

The stock's performance from here is likely to hinge on its guidance and any details the company offers about its upcoming product pipeline.

RIM could ship the next product in its device family, the BlackBerry 8300, by June and a CDMA version of the Pearl as early as May, Walkley expects.

"It's important to see if they can continue the momentum," says Kelmon. But for those investors getting increasingly concerned about valuation, he offers a suggestion: "I would be more likely to sell on any strength prior to or after the report and buy it again on a market correction."