Shares in BlackBerry (BB) might have lost some juice in early trading today, but its auto software and security solutions could prove fruitful for investors in the months ahead.
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Demand From World Leaders
BB stock was flat to begin today, but it has climbed around 2% over the last week and a bountiful 159% over the last three months. Following the sale of its Cylance business to Arctic Wolf earlier this month, the company has two main segments remaining: QNX, whose highly secure software is most often used in automobiles, and Secure Communications, whose blue-chip client list includes governments and large financial institutions.
QNX is Driving Growth
QNX is proving to be quite the ride for investors as its software is now embedded in around 255 million vehicles, including connected and autonomous autos. It is also applicable to other fast-growing sectors such as robotics and medical devices. Indeed, Chief Financial Officer Tim Foote was recently reported as stating that QNX had a unit backlog growing at a compound annual growth rate of around 33% over the last couple of years. That, he said, should begin to boost group profits in the next two or three years.
Adding to this bonanza could be the introduction of subscription fees for services such as security enhancements added to a vehicle’s computer system. On the Secure Communications side, demand for encrypted calls from mobiles is being led by corporates, government agencies, secret service and the military in an increasingly volatile world.
Is BB a Good Stock to Buy?
On TipRanks, BB has a Hold consensus based on 1 Buy and 3 Hold ratings. Its highest price target is $4. BB stock’s consensus price target is $3.50 implying an 42.34% download.
