BlackBerry Stock Has More Potential for Losses than Gains (BBRY)

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Wall Street analysts are expecting more ugly news when BlackBerry (BBRY) publishes quarterly earnings Tuesday morning, which means BBRY stock could rally sharply if it can surprise to the upside.

bbry stock blackberry stock blackberry earnings bbry earnings blackberry passportBut it’s still not worth betting on BBRY unless you’re a fast-money trader. The once-great smartphone maker is struggling to survive as a provider of software and services, and even that’s not going so well.

For the most recent quarter, analysts, on average, expect BlackBerry earnings to … well, there’s won’t be any earnings. The Street figures BBRY will post a loss of 3 cents per share, according to a survey by Thomson Reuters.

To be fair, that’s not as wide as the year-ago loss of 11 cents. (But BBRY is forecast to post a full-year loss this year, as well as next year.)

The expected decline in revenue is even more alarming. Analysts expect the top line to contract by nearly 30%, to $684 million from $966 million in last year’s quarter.

The issue is that, as good as BlackBerry software and services may be, it’s going head-to-head with a load of competitors, including VMware (VMW), Citrix (CTXS), IBM (IBM), Mobileiron (MOBL) and potentially Microsoft (MSFT).

Analysts Slam BBRY

Software sales are the key to BBRY’s very survival, at least as a stand-alone company, and it’s darn hard to be optimistic that it can pull it off. Just listen to what some of the analysts have to say. From Credit Suisse:

“The continued decline of services revenue and the limited visibility of [mobile device management] remains the principal risk to BlackBerry turnaround, and we continue to have reservations on their ability to ramp up software and operate more competitively.”

Over at Imperial Capital, analysts had this to say in a note to clients:

“[BBRY ‘s revenue guidance] appears unrealistic given the company’s middle-of-the-road EMM (enterprise mobility management) suite, as highlighted by market researcher Gartner’s recently published Magic Quadrant report for EMM Suites 2015.”

BBRY stock has lost 17% for the year-to-date and 7% over the last 52 weeks. Of course, longer-term results have been devastating. No, past performance isn’t indicative of future results, but the market hasn’t thought much of BBRY stock for years … with good reason.

Wall Street doesn’t much like BBRY stock, either. It’s actually very rare for an equities analysts to slap a “sell” rating on a stock — any stock — but BBRY has 12 of them. Of the 34 analysts covering BBRY stock, 12 call it “underperform” (that’s essentially a “sell”), and 19 have it at “hold.” The Street has never been shy with “buy” calls, and yet BBRY gets only three.

Furthermore, their median price target is actually below the level BBRY stock is trading at now. It’s safe to say there aren’t a whole lot of analysts telling their clients good things about BBRY.

BlackBerry earnings are always interesting, if only just to see if this once dominant technology company really can pull of a miraculous turnaround. But that’s about it. Retail investors should feel free to look, but not touch BBRY stock.

As of this writing, Dan Burrows did not hold a position in any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2015/06/blackberry-stock-earnings-bbry/.

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