One of the year’s star performers will deliver its May quarter results on Thursday (June 24). With share gains of a hefty 102% in 2021’s choppy stock market, this outperformer is… Blackberry (BB).
As a core member of one of the year’s hottest trends, meme stocks, the once leading smartphone maker turned software provider, has been one of the year’s unlikeliest success stories.
But as with most of the retailer favorites, the rise has almost nothing to do with fundamentals. A fact acknowledged by RBC analyst Paul Treiber, ahead of the F1Q22 print.
“Similar to last quarter, BlackBerry’s shares have rallied significantly ahead of the quarter’s results,” said the 5-star analyst. “We believe the rally reflects trading dynamics, as opposed to materially improved fundamentals. We anticipate that BlackBerry’s core software business would remain soft. BlackBerry may provide an update on the pending sale of its IP portfolio, though we believe the value is already reflected in the stock.”
The company is currently negotiating the sale of its patent portfolio, which Treiber thinks will result in Licensing & Other revenue to dropping by 71% quarter-over-quarter to $15 million. The implication of the decline will be soft overall revenue, which the analyst estimates will come in at $176 million, an 18% year-over-year downturn. Incidentally, the consensus estimate is actually lower – at $171 million. On the bottom-line, Treiber anticipates a sequential decline, calling for adj. EPS of -$0.04, compared to $0.03 in the prior quarter.
With the patent portfolio windfall, the company will be able to finance new software investments. An enticing proposition, considering the patents are worth around $1 billion, but with the stock’s strong rally, as noted above, Treiber believes any additional value is already “priced into the shares.” (By: TipRanks)
#earnings #result #markets #deliver #stock #results #market #sell #smartphone #quarter #gain #buy #stockmarket #share #worldlynewsonline