By Senad Karaahmetovic
Shares of BlackBerry (NYSE:BB) are down roughly 3% in pre-market Friday after the company reported worse-than-expected sales for its fourth quarter.
BlackBerry reported a loss per share of $0.02, better than the analyst consensus for a loss per share of $0.08. However, revenue fell by 18% year-over-year (YoY) to $151 million, missing the $163.5M consensus.
“Despite near-term macro and supply chain challenges for vehicle production, revenue increased by 16% year over year," said John Chen, Executive Chairman & CEO, BlackBerry.
“Cybersecurity business unit saw the timing of a number of large government deals slip into later quarters, but we are confident that they will close this fiscal year.”
The company also provided an FY24 outlook on the conference call. According to RBC, it implies FY24 total revenue of $685-720M, above the consensus at $692M.
TD Cowen analysts upgraded BB shares to Hold from Reduce with the price target of $4 per share (up from $3.75).
“We are upgrading BlackBerry to HOLD, given that the shares have declined by ~68% since we downgraded it in June 2021 during the meme trades run, which we believe was at odds with the pandemic and automotive supply-chain risks. With the pandemic behind us, automotive supply-chain improving, and patent sale completed, we now see less downside risk to the shares,” they said in the upgrade note.
They also believe that the issues hurting the company’s Cybersecurity (CS) business are factored into the price.
“In our view, the IoT business' strong execution offsets the CS challenges,” the analysts added.
RBC analysts said the provided FY24 guidance was “decent.”
“FY24 revenue guidance was slightly above RBC/consensus on an acceleration in IoT revenue through the year, along with a rebound in Cybersecurity. However, given BlackBerry’s challenges over the last several years, we believe the market will discount FY24 guidance pending a turnaround in billings and other key metrics. Maintain Sector Perform,” they said in a note.