BlackBerry (TSX:BB)(NYSE:BB) stock has skyrocketed in January. The stock has more than doubled with 111.6% gains this month so far. In the last 10 days alone, it has risen by about 88%. By comparison, the S&P/TSX Composite Index has seen a 1.1% decline in the last 10 days while it’s trading with just 2.4% gains on a month-to-date basis.
Before we discuss whether it’s the right time to book profit in BlackBerry stock, let’s take a quick look at what drove these outstanding gains in its stock lately.
In mid-January, Bloomberg cited an email from BlackBerry’s spokesperson Karen Clyne to report that BlackBerry and Facebook have settled their years-long “disputes pursuant to a confidential agreement.” The spokesperson denied commenting any further on the issue, however. By January 13, BlackBerry was trading at $9.45 per share on a slightly positive note — with about 12% gains for the month. Since then, the stock has been making big moves in each trading session that have made it the biggest gainer on the TSX Composite Index.
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For a little background, BlackBerry sued Facebook and its subsidiary WhatsApp and Instagram in 2018 for patent infringements. BlackBerry claimed that Facebook’s and its subsidiaries’ messaging apps violate its intellectual property rights.
Time to sell BlackBerry stock?
I’ve been suggesting buying BlackBerry stock for the last few months. My recommendation to buy it was primarily based on BlackBerry’s rising bets on the fast-growing electric vehicle (EV) market. In December, BlackBerry partnered with Amazon Web Services to develop a new intelligent vehicle data platform and market it to automakers. The company’s new platform will enable automakers to provide a consistent and secure way to read and control vehicle sensor data. It plans to soon add more EV specific functionalities to its vehicle data platform.
Many mainstream automakers already use BlackBerry’s QNX platform in their vehicles — including in their electric cars. Now, its new intelligent vehicle data platform would make its offerings more attractive for automakers — without any major changes in its marketing budgets. If we observe sharp recent gains in EV stocks like Tesla and NIO, we can expect BlackBerry to be on the same path this year with its increasing focus on the rising EV demand.
These were some of the reasons why I found BlackBerry stock to be an even much better investment option than Bitcoin or any other cryptocurrency.
Bottom line
Apart from these positive factors, BlackBerry’s stock has skyrocketed in the last month due to its recent settlement with Facebook. Despite its massive recent gains, I don’t find any considerable reasons to sell its stock right now. Although if you’re holding a huge buy position in its stock with a short-term goal in mind, it would be wise to book profit at least partially.
While its stock might see a little technical correction in the weeks ahead, I still find BlackBerry’s shares to be a wonderful long-term investment option. That’s why long-term investors could continue to hold its stock without worrying about an expected downside correction.
The post BlackBerry (TSX:BB) Stock: Time to Sell? appeared first on The Motley Fool Canada.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. David Gardner owns shares of Amazon and Tesla. Tom Gardner owns shares of Tesla. The Motley Fool owns shares of and recommends Amazon and Tesla. The Motley Fool recommends BlackBerry and BlackBerry and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. Fool contributor Jitendra Parashar has no position in any of the stocks mentioned.
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The average price target represents 11.42% Increase from the current price of $2.495. What do analysts say about BlackBerry? BlackBerry's analyst rating consensus is a Hold.
Based on 4 Wall Street analysts offering 12 month price targets for BlackBerry in the last 3 months. The average price target is C$4.22 with a high forecast of C$4.85 and a low forecast of C$3.74. The average price target represents a 27.61% change from the last price of C$3.31.
The intrinsic value of one BB stock under the Base Case scenario is 9.71 USD. Compared to the current market price of 2.42 USD, BlackBerry Ltd is Undervalued by 75%.
With hopes of a recovery in automotive demand, BlackBerry has a chance to unlock the revenue backlog. BlackBerry expects its IoT revenue to grow 9.3% in fiscal 2025. However, it will be a while till the company reports positive earnings per share (EPS).
Valuation metrics show that BlackBerry Limited may be overvalued. Its Value Score of D indicates it would be a bad pick for value investors. The financial health and growth prospects of BB, demonstrate its potential to underperform the market. It currently has a Growth Score of B.
Historical daily share price chart and data for BlackBerry since 1999 adjusted for splits and dividends. The latest closing stock price for BlackBerry as of July 26, 2024 is 2.48. The all-time high BlackBerry stock closing price was 147.55 on June 19, 2008.
According to the latest long-term forecast, BlackBerry price will hit $3 by the middle of 2026 and then $4 by the end of 2028. BlackBerry will rise to $5 within the year of 2030.
BlackBerry Ltd's market capitalization is 1.5B USD. BB stock price is 2.48 USD. BB stock price (2.48 USD) is 70% less than its Intrinsic Value (8.27 USD).
“BlackBerry remains on track to be both profitable on a non-GAAP basis and generating positive cash flow in the fourth quarter,” Chief Executive John Giamatteo said in a release. Quarterly revenue came in at $144 million, down from $173 million in the February quarter and $373 million in the year-earlier period.
As of 2024-07-28, the Intrinsic Value of BlackBerry Ltd (BB.TO) is (25.31) CAD. This BB.TO valuation is based on the model Discounted Cash Flows (Growth Exit 5Y). With the current market price of 3.41 CAD, the upside of BlackBerry Ltd is -842.4%. The range of the Intrinsic Value is (93.64) - (14.65) CAD.
Based on analyst ratings, Target's 12-month average price target is $176.76. Target has 16.83% upside potential, based on the analysts' average price target. Target has a consensus rating of Moderate Buy which is based on 16 buy ratings, 11 hold ratings and 1 sell ratings.
BlackBerry(TSX:BB) stock fell 20% after it announced plans to split on October 4, 2023. Since December, there has been a series of 20% dips in the second half of every month, with February being an exception. In December 2023, the stock fell 20% after the company announced a new CEO.
BP p.l.c. has 37.01% upside potential, based on the analysts' average price target. Is BP p.l.c. a Buy, Sell or Hold? BP p.l.c. has a consensus rating of Moderate Buy, which is based on 9 buy ratings, 2 hold ratings and 1 sell ratings.
According to S&P Global Market Intelligence, the average analyst target price for AMZN stock is $221.92, representing implied upside of nearly 40% to current levels. Additionally, the consensus recommendation is Strong Buy.
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