(BB) Blackberry: bargain or trap?
As a growth investor, I’ve been waiting for a big Christmas rally, but all I’ve been getting is disappointment. One stock that has particularly caught my attention is BlackBerry (NYSE: BB) (TSX: BB), which has seen its stock plummet to new lows this week. In fact, BB stock has lost 60% of its market value this year, underperforming peers that have only lost 40%.
I was initially hopeful when I heard that BlackBerry had beaten expectations for both earnings and revenue in its third quarter. However, concerns about its flattish revenue growth and declining growth in its mainstay cybersecurity business weighed on the stock. This segment makes up over two-thirds of the company’s revenue and has been facing increasing competition and shrinking profit margins. The outlook for the Internet of Things (IoT) segment is also bleak, as it is being impacted by challenges in the global automotive industry.
In addition to these internal challenges, BlackBerry is facing macro headwinds that are likely to continue weighing on the stock in the near term. This includes more interest rate hikes and turmoil in the broader markets.
Given these factors, I’m not sure if BlackBerry’s stock will see a significant recovery, even if the broader markets improve next year. It may be best not to have high expectations for the stock in the next few quarters.
Disclaimer: This article is for informational and entertainment purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any major financial decisions.
