Apr 23, 2021
[3 min Read]
At a current price of $11.05 (CAD), I strongly believe BlackBerry is a long-term investment due to BlackBerry's strategic partnerships and overall value.
Background: Blackberry Limited (TSX:BB, NYSE:BB) founded in 1985 by Mike Lazaridis and Douglas Fregin. Previously known as Research in Motion Limited (RIM) but had an official name change in 2013 to BlackBerry (BB). BlackBerry is well-known for its smartphones during the early to mid-2010s that were highly popular to the corporate demographic due to their easy access to emails and its Web functionality. Since then, the company has shifted their focus to software and enterprise services.
Mission: BlackBerry's goal is to become the world's leading provider of the most secure and trusted end-to-end mobility solutions.
Strategy: Lead embedded enterprise software space, and grow technology and IP licensing
Major Shareholders: Primecap Management Co. (10.56%), Hamblin Watsa Investments (8.31%), The Vanguard Group (2.24%)
Key Business Segments by Revenue (2020): Enterprise Software (44%), Licensing (31%), Technology Solutions (22%)
Geographic Segmentation: North America (66%), Europe, Middle East and Africa (25%), Asia Pacific (8%), and Latin America (1%)
(All Values in CAD $BILLION unless noted otherwise)
Enterprise Value: $6.19
Market Cap: $6.13
Total Debt (2021): $1.07
Revenue (2021): $1.19
Cash ($M): $262
Gross Profit Margin (2021): 51.62%
Operating Margin (2021): -16.69%
Price to Earnings Ratio (P/E): 108
Price to Book Ratio (P/B): 3.82
Return of Equity (ROE): -55.60
Debt to Equity Ratio: 56.05
Current Ratio: 2.34
BlackBerry has previously demonstrated its commitment to growing the company both organically and also through acquisitions. In 2019, the Cyclance deal is evidence of management's willingness to acquire companies and products and enhance BlackBerry's offerings.
Details on 2019 Cyclance deal:
Blackberry has also shown their ability to position themselves among numerous high growth industries by serving the need of leading corps. and governments.
Partnership with Baidu: Baidu's HD maps will be run on BB's QNX Neutrino Real-Time Operating System (RTOS) and will be mass-produced in forthcoming GAC New Energy Aion models from GAC Group's EV arm. BB's RTOS will be the foundation for Baidu's ‘Apollo' autonomous driving platform.
Partnership with Amazon: Multi-year agreement with Amazon's cloud service business, AWS. The agreement plans to develop and market Blackberry's Intelligent Vehicles Platform (IVY). This deal with Amazon is expected to bring in regular revenue over multiple years. An analyst predicts that Blackberry will be able to generate roughly around $1B in annual revenue from IVY by 2028 as a result of this partnership.
Although BlackBerry is a company still mainly focused on its product development and customer acquisitions, they are still a good investment opportunity and are at the end of their corporate repositioning and have now established themselves as a major player in security and autonomous vehicle industry.