BlackBerry’s stock could soon go higher, this analyst says

Canadian tech stalwart BlackBerry (BlackBerry Stock Quote, Chart TSX:BB) has been a boon for investors so far in 2019, with the stock up 31 per cent year-to-date. And there may be more gas in the tank, says Brooke Thackray, research analyst at Horizons ETF, who thinks the stock looks technically sound.

BlackBerry has done well to pull out of a downward trend that started in January of 2018 and lasted for almost a year. From a high of $18.14, the stock plummeted to $8.94 by Christmas Eve. But it’s been uphill ever since, aided by strong fourth quarter earnings delivered in late March and boosting the stock into the $12.00 range. (All figures in Canadian dollars unless otherwise noted.)

Thackray says the chart shows BB breaking out and heading higher.

“This is a support level [at $9.00]. We saw a trend taking place [since early 2018] where we saw this pattern of lower highs, but once that’s broken out here [in 2019], that’s actually a positive sign,” Thackray told BNN Bloomberg on Wednesday.

“So, we have seen a little bit of a breakout, and their earnings popped it up as well. We still have a little ways to go before we hit some of those highs [at $14.00], so there’s some space above. Technically speaking, it’s solid,” he says.

BlackBerry posted top and bottom line consensus beats in its quarterly report at the end of March, generating revenue of US$255 million which was up from US$233 million a year prior and better than analysts’ expectation of US$241.3 million. The company’s US$51 million in profit or US$0.11 per share was also better than the Street’s US$0.06 per share.

CEO John Chen stated that the quarterly results were proof positive of the company’s successful turnaround from handset maker to money-making software and security business.

“This profitable growth is a clear indication that we have successfully pivoted to become an enterprise software company,” Mr. Chen said to analysts on the conference call.

Thackray says over the short term, the stock may pull back but it’s in a good position.

“You find that technology companies tend to not do so well coming up on a seasonal basis. It’ll settle back down — with its earnings it went up and now it’s come down a little bit. That’s just digestion and back-filling,” he says.