BlackBerry Limited
BB
appears to be a promising stock to add to the portfolio in tackling the current macroeconomic and geopolitical uncertainties and benefit from its healthy fundamentals and growth prospects.
Let’s look at the factors that make the stock an attractive pick:
Attractive Pricing:
Wall Street is facing extreme volatility due to macroeconomic factors such as rising inflation and interest rate hikes by the Federal Reserve, the ongoing Russia-Ukraine war, increased crude oil prices and lingering supply-chain woes.
The above-mentioned factors are taking a toll on major U.S. indices. In the past year, the S&P 500 has declined 16.2%.
The stock is down 65.1% from its 52-week high level of $9.49 on Jan 4, 2022, making it relatively affordable for investors.
Positive Earnings Surprise History:
BB has an impressive surprise record. Earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters, the average being 41.4%.
Solid Rank:
BB currently carries a Zacks Rank #2 (Buy). You can see
the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
Upbeat Guidance:
For fiscal 2023, BlackBerry expects the Internet of Things (IoT) revenues in the range of $205-$210 million, indicating 15-18% growth year over year. Cyber business billings growth is expected within 8-12% due to increased uptake of security products.
Factors That Augur Well:
Headquartered in Canada, BlackBerry provides intelligent security software and services to enterprises and governments around the world. It offers devices and software platforms for managing security, mobility and communications among hardware, programs, mobile apps and the IoT.
The company’s performance is benefiting from continued momentum in the IoT business segment, which secured nine new design wins in Auto and 15 in the General Embedded Market in the last-reported quarter.
BlackBerry’s QNX software is now installed in more than 215 million vehicles. Within the auto sector, increasing consolidation of digital cockpits and the adoption of advanced driver assist systems augurs well for BlackBerry.
Recently, the company announced that Human Horizons will be deploying BlackBerry QNX technology for the autonomous driving controller and intelligent digital cockpit controller features of its HiPhi Z vehicle.
The company expects the cybersecurity business to gain momentum owing to rising multiyear deals and improved churn rates. Also, the company plans to introduce Cyber Threat Intelligence in January 2023 to provide its users with professional threat intelligence services to tackle cyber threats.
Further, the expansion of its BlackBerry SecuSUITE partner network in the Asia Pacific will assist businesses and governments in more efficiently securing mobile communications and safeguarding people and operations.
In addition, the company’s debt-to-capital ratio has reduced sequentially and year over year to 22.6%.
Apart from its solid fundamentals, the company is prone to several risks. The company operates in a highly competitive and capital-intensive software business. This is likely to negatively impact the company’s performance.
Other Stocks to Consider
Some other top-ranked stocks from the broader technology space are
Arista Networks
ANET
,
Jabil
JBL
and
Asure Software
ASUR
, each presently sporting a Zacks Rank #1.
The Zacks Consensus Estimate for Arista Networks 2022 earnings is pegged at $4.37 per share, up 0.5% in the past 60 days. The long-term earnings growth rate is anticipated to be 17.5%.
Arista Networks’ earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 12.7%. Shares of ANET have declined 12.8% in the past year.
The Zacks Consensus Estimate for Jabil’s 2023 earnings is pegged at $8.31 per share, rising 1.6% in the past 60 days. The long-term earnings growth rate is anticipated to be 12%.
Jabil’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 8.9%. Shares of JBL have declined 5.7% in the past year.
The Zacks Consensus Estimate for Asure Software’s 2022 earnings is pegged at 7 cents per share, rising 75% in the past 60 days. The long-term earnings growth rate is anticipated to be 23%.
Asure Software’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 83.3%. Shares of ASUR have soared 22.2% in the past year.
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