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BlackBerry is trading at a 20 year low

BB stock

The once mighty BlackBerry (BlackBerry Stock Quote, Chart, News, Analyst Financials TSX:BB) has fallen below four dollars, Canadian. The last time the stock was this low was late-2003, when it began a run that would take it over the $200 mark, in 2007.

That year, of course, marked the beginning of the Waterloo-based company’s (then known as Research in Motion) downfall. The first-generation iPhone was announced by Apple’s Steve Jobs on January 9, 2007. It would become one of the best selling mobile phones ever and gave the BlackBerry a push toward its ultimate exit from the mobile device market.

Today, BlackBerry has a new mission, providing “intelligent security software and services to enterprises and governments around the world” and powering a couple hundred million vehicles. But that does not seem to be enough to keep the wolves from the door.

On December 20, the company reported its Q3, 2024 results. BB posted Adjusted EBITDA of (US) $18-million on revenue of (US) $175-million a topline that was up four per cent over the same period a year prior.

“This was a good quarter for BlackBerry. Our IoT business delivered solid revenue growth and continued its impressive design win momentum. We showed particular strength in Automotive, especially in ADAS where we continue to expand our market position,” said new CEO John J. Giamatteo. “We also saw a strong quarter for the Cybersecurity business, securing large strategic deals with leading government agencies that helped drive strong sequential revenue growth and margin expansion. Work has commenced to fully separate and significantly rightsize our businesses, and we expect to further reduce operating cashflow usage in Q4.”

But RBC analyst Paul Treiber, who lowered his price target on the stock following the quarter, said BlackBerry’s future is simply uncertain.

“Visibility has declined further,” the analyst said. “Although Q3 Cybersecurity revenue was healthy (up 8 per cent year-over-year to $114-million, matching consensus), it reflects contribution from a large license contract. BlackBerry’s reduced Q4 Cybersecurity outlook and soft KPIs like ARR (down 13 per cent year-over-year), net revenue retention (82 per cent), and deferred revenue (down 3 per cent year-over-year) are visible indicators of the challenges the business continues to face. For IoT, the reduction in BlackBerry’s Q4 outlook reflects both near-term headwinds (i.e. reduced auto production) and delays regarding new investments (i.e. developer seats, services). BlackBerry is continuing with the separation of IoT and Cybersecurity, which could lead to ‘optionality’ such as a divestiture or spin-off. While these corporate actions may be potentially value creating, it raises uncertainty regarding BlackBerry’s future, in our view.”

BlackBerry introduced its smartphone to the market 25 years ago, the BlackBerry 850 hit the market on Jan. 19, 1999.

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