BlackBerry (TSX:BB)(NYSE:BB) stock once made investors billions of dollars. In 2002, shares were priced at $7. A decade later, they surpassed $250!
Those days are long gone. Right now, BlackBerry stock is back down to $7.
But what if I told you another dramatic run is just around the corner? In fact, BB stock could skyrocket 10 times in value. Only a few dominos need to fall before this becomes a rapid-growth stock.
This story is amazing In 2012, BlackBerry had a 20% global market share for smartphones. Today, it doesn’t make a single phone. What happened? Only the greatest turnaround in Canadian history.
CEO John Chen realized years ago that hardware was a losing proposition. “I personally do not believe devices are going to be the future of any company,” he once said.
Since he made that statement, he’s wound down the business entirely, pivoting to a market with much better prospects: cybersecurity software.
This turnaround is no longer a theory. The company is now a pure-play cybersecurity bet.
“BlackBerry no longer manufactures phones, but it makes more than $1 billion in revenue per year selling things like security software, an operating system widely used in cars and patent licenses,” reports Axios.
“BlackBerry gets about $600 million from its so-called platform business, which includes the company’s security and enterprise device management software efforts. The app side of things, which includes QNX, generates around $400 million per year. Licensing its portfolio of more than 38,000 patent families earns BlackBerry around $200 million to $250 million per year.”
The problem is that the market still thinks of this business as a dying smartphone brand. As we’ll see, this ignorance is creating a giant opportunity.
Bet on BlackBerry stock? The cybersecurity space is exploding. Valuations are approaching crazy levels.
Crowdstrike Holdings trades at 37 times sales. Zscaler stock is priced at 42 times sales. Palo Alto Networks is valued at eight times sales.
BlackBerry stock, meanwhile, is pegged at just three times sales — a 60% to 90% discount to its peer group! If the multiple normalizes, shares could easily rise 150%, with long-term potential to rise 10 times in value.
The company has carefully put all the necessary pieces in place. The stock is a cybersecurity pure play, with differentiated offerings like Cylance, which uses artificial intelligence to detect threats before they occur. In recent quarters, positive organic revenue growth was achieved for the first time in nearly a decade.
Our world is becoming more connected every second. Every connection is vulnerable, giving the cybersecurity industry a long runway for growth. The market has rightly identified this as a major opportunity, but due to misconceptions, BlackBerry stock has been left in the dust.
It’s not often that you get an opportunity to multiply your invested capital by 10 times! With a bargain valuation and clear upside already defined by other stocks in its industry, BlackBerry shares are perfect for investors willing to take a risk on a transformed business.
This bet may take some time to pay off as it’s unclear when the market will catch on. But once it does, prepare for takeoff.
The post BlackBerry (TSX:BB): Will the Stock 10x in Price? appeared first on The Motley Fool Canada.
Tom Gardner owns shares of CrowdStrike Holdings, Inc. and Zscaler. The Motley Fool owns shares of and recommends CrowdStrike Holdings, Inc., Palo Alto Networks, and Zscaler. The Motley Fool recommends BlackBerry and BlackBerry. Fool contributor Ryan Vanzo has no position in any stocks mentioned.
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