BlackBerry Ltd (NYSE:BB) shares soared on Friday following the release of its third-quarter results. The company reported quarterly revenue of $143.00 million, which fell short of the analyst consensus estimate of $161.49 million. Despite this, the adjusted EPS came in at $0.02, surpassing analyst expectations.
Looking ahead, BlackBerry anticipates fourth-quarter revenue in the range of $126.00 million to $135.00 million, lower than the estimated $150.08 million. The company also expects an adjusted EPS of $(0.01) to $0.01. Analysts reassessed their views on the stock after the quarterly report.
RBC Capital analyst Paul Treiber maintained a Sector Perform rating on BlackBerry with a price target of $3.25.
Notably, this third quarter marks BlackBerry’s first financial results without Cylance. While the quarter outperformed Treiber’s projections, the fourth-quarter guidance fell short of expectations.
Excluding Cylance, third-quarter revenue was $143 million, showing a 7% decrease year-on-year but still above Treiber’s estimate of $128 million. Revenue from IoT, Secure Communications, and Licensing segments all exceeded analyst expectations.
Although BlackBerry is now profitable and generating positive operating cash flow, Treiber highlighted that the stock’s valuation may continue to trade at a discount compared to peers until there is substantial growth in the IoT sector.
Trading at a discounted valuation of 3.0 times NTM Enterprise Value/Sales, BlackBerry’s valuation is expected to remain discounted until there is a significant improvement in IoT growth and profitability.
As of the latest update, BlackBerry stock was up 23.5% at $3.679 on Friday.
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