BlackBerry (BB) (TSE: BB) provides enterprise software and services which focus on securing and managing Internet of Things endpoints. It offers a platform comprised of communication and collaboration software and safety-certified embedded solutions.
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Earnings Results
The company recently reported earnings for its first quarter of Fiscal 2023. Adjusted earnings per share came in at -$0.05, which was above analysts’ consensus estimate of -$0.06. When including the one-time litigation settlement of $165 million, earnings per share were -$0.31. In the past nine quarters, the company has beat or met earnings estimates each time.
Nevertheless, BlackBerry saw revenue decline year-over-year, with revenue hitting $168 million compared to $174 million. The decrease in revenue can be attributed to a decrease in its Licensing and Other segment. However, its Cybersecurity and IoT segments increased by 6% and 19% year-over-year, respectively.
Unfortunately, gross profit decreased by 9%, which was more than the revenue decline of 3%. Indeed, its gross margin has contracted from 66% to 63%, which can be attributed to margin contractions in the Cybersecurity and Licensing segments. The IoT segment was the only one that kept gross profit margins steady at 84%. Despite these factors, the stock is currently up about 3% on the day.
Investor Sentiment
The sentiment among TipRanks investors is currently negative. Out of the 537,350 portfolios tracked by TipRanks, only 0.7% hold BlackBerry. Furthermore, in the last seven days, 0.4% of those holding the stock decreased their positions. Likewise, 0.3% of TipRanks investors decreased their positions in the last 30 days.
As a result, the stock’s sentiment is just slightly below the sector average, as demonstrated in the following image:
Analyst Recommendations
BlackBerry has a Hold consensus rating based on three Holds and one Sell assigned in the past three months. The average BlackBerry price target of $6.01 implies 9.3% upside potential.
Final Thoughts
BlackBerry saw an underwhelming quarter because its revenue and gross profit margin declined. As a result, analysts remain neutral on the stock as it attempts to return to growth.
