BlackBerry: Valued Like A Growth Story, But Tied To A Cyclical Industry

BlackBerry has successfully pivoted from phones to high-growth, high-margin QNX and secure communications segments.

BB’s QNX automotive software and secure communications divisions both posted 20%+ top-line growth, with the latest quarter delivering the first positive operational cash flow in nine years.

Despite strong fundamentals, BB trades at a premium (forward P/S 8.6x, GAAP P/E 78x), demanding sustained double-digit growth amid macro headwinds and intense competition.

I rate BB as hold, seeking a $6–$7 entry point due to valuation concerns and uncertain growth sustainability.

The pivot that BlackBerry ( BB ) pulled off in the recent years is definitely something to acknowledge and appreciate here. They went from a broken phone business to a high growth communications and AI company.