What’s the value of BlackBerry Ltd (NASDAQ:BBRY) and the upside potential of BBRY stock? Although the beleaguered tech giant has made and continues to make significant fundamental operational improvements, it’s nonetheless tough to pinpoint where the company is going.

The Q1 Beat That Investors Hated

BBRY stock remain under pressure, and have lost as much as 14% of since the Canadian company reported a first-quarter fiscal 2018 revenue miss that fell 39% year over year to $244 million, below consensus estimates by $20 million. And while adjusted earnings per share of 2 cents topped  estimates by 4 cents, the bottom-line was boosted by the arbitration payment of $940 million it received from Qualcomm Incorporated (NASDAQ:QCOM).

In other words, the quality of the beat was undermined by a one-time item. And investors punished the BBRY stock for it, despite the company reiterating its FY2018 guidance and instituting a share buyback.

The weak revenue, which was driven by customer losses, was a major concern and spooked investors into thinking that software business — where CEO John Chen has mortgage the company’s future — was beginning to slow.

Is BlackBerry a Software Company?

Since losing the smartphone market to Apple Inc. (NASDAQ:AAPL) and Samsung Electronics (OTCMKTS:SSNLF), BlackBerry has sought to carve a niche for itself in software and security. To its credit, the company is finally making money in a much quicker time than expected, which speaks to the improvements Chen has made. As it stands, Enterprise software and services now account for about 40% of total revenue, while BlackBerry Technology Solutions make up almost 15%. Licensing, IP and other revenue account for 13% of the revenues, which leaves handheld devices to contribute about 15%.

With Enterprise software and services now accounting for 40% of total revenue, it can be argued that BBRY should be evaluated as software specialist. After all, the company, which maintained its forecast for fiscal 2018, expects its software business to either outperform or at least perform on par with the overall market in fiscal 2018. Chen sees adjusted EPS in fiscal 2018 as well free cash flow to be consistent with the market.

But that’s where Wall Street has doubt.

Immediately following the earnings results, Morgan Stanley’s James Faucette, who maintained an “equal weight” rating on BBRY stock with a $10 price target, noted he found the company’s software revenue disclosures “confusing,” arguing the company made it “difficult to determine and rank any underlying growth drivers.” RBC’s Paul Treiber, who has a “market perform” rating and $9.50 price target, thinks the software business is “back-end loaded.” In other words, Treiber expects BBRY to have a strong second-half showing.

John Butler of Bloomberg Intelligence sees potential software revenue growth of 10% to 15% in the second half. To be sure, BBRY just completed its fiscal first quarter of 2018. This means BlackBerry could also struggle in the second quarter, ending in August. The second half, however, starts in the November quarter. And with BBRY stock down by double digits over the past month, could the market be overreacting?

Andrew Left, founder of Citron Research, recently equated BlackBerry to Nvidia Corporation (NASDAQ:NVDA) — the high-flying graphic chip company that is now paving a future in autonomous driving, artificial intelligence (AI) and datacenter technology. Left believes BlackBerry’s QNX software — its vehicle infotainment platform — should be evaluated much higher than the company’s legacy hardware/software businesses.

“BBRY has virtually completed its transition from hardware to software, cut expenses so it no longer burns cash, secured its balance sheet….,” Left argues. Adding “When Wall Street shifts its frame of expectations toward the future, and gets over their legacy business, watch out.”

Will Left Be Proven Right?

After years of gloom, there is now reason to be optimistic about the BBRY. Despite the Q1 revenue miss and questions about its software capacities, BBRY continues to make great strides, especially in cybersecurity and markets such as the Enterprise of Things. Meanwhile, the company announced that both Qualcomm and Nvidia, which has prominent automotive platforms, will be adopting BlackBerry’s technology, which could enhance BlackBerry’s ecosystem.

What’s more, BBRY not only announced that it still had over 3,000 enterprise clients at the end of the quarter, the company ended with $933 million in cash and cash equivalents, versus $734 at the end of fiscal 2017, up almost 30%.

Bottom Line for BBRY Stock

The fact that the company maintained its forecast for fiscal 2018 was encouraging, suggesting that — as analysts predict — the second half of the fiscal year will be better than the beginning. Likewise, the improvements in enterprise software and services, which accounts for 40% of total revenue, should continue to grow, strengthening the argument for BBRY to be valued as a software company, which typically commands higher multiples.

As such, despite the recent decline share price, I continue to expect BBRY stock to reach $15 in the next 12 to 18 months, delivering 51% returns.

As of this writing, Richard Saintvilus held shares of BBRY.