Once upon a time, BlackBerry Ltd (NASDAQ:BBRY) was a company that defined innovation. One of the first to make smartphones widely accessible and “sexy,” the former hardware-focused company has since dwindled in size to a much smaller version of its former self — this time, focusing purely on the software side of the business. With a new influential CEO, a well-thought out shift in strategy and the viability of a completely new industry, BBRY stock has (finally) rebounded of late, with investors piling their money into it after years of stark operational disappointment.

The shift to bringing the company’s secure software to the autonomous vehicle segment is the key driver behind the future of BlackBerry that CEO John Chen has been banking on for some time now.

In 2016, the CEO made the decision to invest $100 million into a new QNX autonomous vehicle testing hub, which would serve to provide the QNX software platform BlackBerry is known for with a first-mover advantage in this up-and-coming sector. The company released guidance last year of 10%-15% growth in software sales on the bullish outlook for its QNX segment, forecasts which were clearly taken with a grain of salt at the time.

BBRY Stock: With Traction Comes Buyout Expectations

The forecasts which were largely pushed aside by investors and analysts are now being reconsidered by the market, with some analysts reporting outright bullish medium-term price targets for BBRY stock. For a company which has seen its share price plummet more than 95% from its peak, a large price target increase from an analyst seems almost unheard of; from a research firm known for short-selling picks, even more so.

On June 1, Citron Research published a report on BBRY, suggesting that investors consider the future impact autonomous driving will have on the company’s business model and attractiveness as a buyout target, given the current premiums the market has ascribed to chip makers such as Nvidia Corporation (NASDAQ:NVDA).

The report also lists the large billion-dollar settlement with Qualcomm, Inc. (NASDAQ:QCOM), the current QNX install base of 60 million vehicles, as well as a competent and well-incentivized CEO John Chen, as reasons for providing a 24-month $20 price target when the price of the stock was trading around the $10-level at the time.

Why I Don’t Buy the BlackBerry Hype

I’ve looked at BBRY for a number of years, and while I do like the fact that the company has done a good job of trimming expenses and boosting its software revenue, I find a few key flaws with the $20 thesis proposed by Citron:

First, I believe that a large portion (nearly all) of the value received during the Qualcomm “lottery ticket” lawsuit payout was already priced into BBRY stock at the time the report was published. When Wall Street has five minutes to digest a piece of information, let alone five days, investors should consider this piece of information baked in.

Secondly, I don’t buy the install base estimates provided by Analyst Andrew Left at Citron. While I can’t argue with the broad strokes of Mr. Left’s research in doing a deep dive into BlackBerry’s customer base, it should be noted that two days before the Citron report was released, Toyota Motor Corp (ADR) (NYSE:TM) announced it would be replacing the QNX software platform with an Automotive Grade Linux (AGL) system instead.

Toyota, the world’s largest car producer, indicated that the 2018 Camry would now be fitted with AGL software, and made specific reference to the fact that the setup of AGL as a collaborative open-source platform made it more attractive due to the fact that the AGL platform would reduce development costs and increase the speed at which Toyota would be able to roll out new features — attributes that are very important to carmakers.

The world’s largest automaker pulling out of the QNX family is a huge negative for BBRY stock; however, I believe what is even worse is the company’s outright endorsement of the AGL system. Should one or two other carmakers follow suit, I believe the $20 thesis will be crushed very quickly.

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