BlackBerry Ltd (NASDAQ:BBRY) has had a standout year, with the shares up about 41%. Actually, the company has had a better performance than some of the world’s best tech operators, like salesforce.com, inc. (NYSE:CRM) and Oracle Corporation (NYSE:ORCL).

Yet it’s important to note that CEO John Chen has a solid track record. Before joining BBRY, he pulled off a turnaround at Sybase, which he went on to sell to SAP SE (ADR) (NYSE:SAP) for $5.8 billion.

But Chen has also had success at other firms like Convergent, Pyramid Technology and Siemens AG (ADR) (OTCMKTS:SIEGY).

Now as for his stint at BBRY, Chen has been able to effectively cut back on the costs and restructure the operations. But he also moved away from the legacy handset business — which got ravaged by Apple Inc. (NASDAQ:AAPL) and Alphabet Inc (NASDAQ:GOOGL,NASDAQ:GOOG) — and transformed the company into an enterprise software firm.

Oh, and in the meantime, Chen has had some good luck. Just look at the $815 million arbitration award from Qualcomm, Inc. (NASDAQ:QCOM). With this windfall, Chen announced the authorization of the repurchase of as much as 31 million shares (this is about 6.4% of the outstanding shares). But he also hinted that there will be more acquisitions.

No doubt, while all this is encouraging, I still think there are some major risks to consider. If anything, investors may have gotten overeager with BBRY stock.

OK then, so let’s take a look at some of the critical issues with the company:

Issue #1 for BBRY Stock – Choppy Turnaround

BBRY is still a work-in-progress, as seen with the fiscal first-quarter results. Note that revenues plunged by 41% to $235 million and the adjusted earnings came to only 2 cents a share.

Why the drop off? Well, it appears that the growth in the software business is not effectively making up for the rapid deterioration in the old-line products and services. During the quarter, the software revenues increased by only 12.6%.

But this should not be a surprise. The enterprise software business can be choppy since it is common for customers to delay orders. Besides, the BlackBerry brand is far from robust. In other words, it is probably tough for the company to snag new customers.

As InvestorPlace’s Vince Martin has noted:

“ … it’s not a company that has established — at least not yet — any ability to grow in the way that BBRY bulls expect. It’s not impossible — but it will be a tough road for BlackBerry. And I think it’s too tough a road to bet on BBRY stock, even below $10.”

Issue #2 for BBRY Stock – Competition

BlackBerry is really a hodgepodge of software products. They span from security to mobile device management systems to automotive technologies to messaging.

Unfortunately, all these markets are highly competitive. Just some of the rivals include Fortinet Inc (NASDAQ:FTNT), VMware, Inc. (NYSE:VMW), Microsoft Corporation (NASDAQ:MSFT), International Business Machines Corp. (NYSE:IBM) and SAP. And yes, all these companies have much more scale and resources.

Interestingly enough, there are already signs that the pressures are taking a toll. A prime example is in the auto market, which is based on the QNX system. Recently BBRY lost a marquee client for this business, Toyota Motor Corp (ADR) (NYSE:TM).

Issue #3 for BBRY Stock – Valuation

BlackBerry stock is far from cheap. Consider that the forward price-to-earnings ratio is at 40X. All in all, this is fairly steep given that the growth rate is sluggish and that the competitive landscape remains intense.

Oh, and yes, Wall Street analysts are generally skeptical. Keep in mind that the average price target on BBRY is at $9.6, which is essentially at the current market value.

Tom Taulli runs the InvestorPlace blog IPO Playbook and operates PathwayTax.com, which provides year-round tax services. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.