BlackBerry has a lot left to prove, Brian Acker says

Lately, BlackBerry (BlackBerry Stock Quote, Chart TSX:BB) has been getting a lot of love from investors, and not just because of its storied history —the stock has been performing admirably over this first stretch of 2019.

But don’t count investment strategist Brian Acker among the converted, as the CEO and president of Acker Finley says he still doesn’t trust the company’s fundamentals.

“I’m not buying, not yet,” says Acker, to BNN Bloomberg on Monday. “The press releases and with [BlackBerry CEO] Chen out there, that’s great but there are still no earnings. It was losses and now they’re break even.”

“Our model price is still $3.83, while it closed in the US at $9.21. So, the stock has kind of roared ahead here without the fundamentals,” he says. (All figures in US dollars.)

BlackBerry had it rough in 2018, where its share price finished the year down 40.8 per cent, but as it is for much of the market, 2019 has been a different story so far, with the stock currently up over 29 per cent year-to-date.

Investors approved of the software and security company’s last quarterly report, which came on March 29 and featured consensus beats on both its top and bottom lines. BB’s Q4 for its fiscal 2019 ended February 28 included revenue of $255 million, up from $233 million a year prior and better than analysts’ expectations of $241.3 million. The company’s $51 million in profit, or $0.11 per share, also beat the Street’s estimate of $0.06 per share.

On the quarterly report, BlackBerry’s share price shot up almost 16 per cent, briefly rising back above the $10.00 mark before drifting down to where it currently trades in the low $9.00 range.

On the company’s performance over its fiscal 2019, CEO John Chen said that BlackBerry’s profitable growth is a clear sign that the years-long transformation from handset maker to security company has been a success. But Acker is less convinced, saying, “I’d rather see some earnings momentum before I’m going to jump on board. I’m agnostic until it’s proven that this particular area where BlackBerry is in security has enough oomph in it for it to go forward.”