HomeMarket NewsMicro Cap Stocks Fret Not, But Heavens – Analysts Grumble As BlackBerry Suffers Financing Woes...

Fret Not, But Heavens – Analysts Grumble As BlackBerry Suffers Financing Woes despite Earnings Surge

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The Plight of Blackberryprompted analyst Paul Treiber of RBC Capital Markets to uphold a Sector Perform rating onΒ BlackBerry LtdΒ BB while slashing the price target to $4 from $4.50. This move comes despite the third-quarter earnings beat, announced just yesterday.Β 

Surpassing projections, BlackBerry reported quarterly earnings of one cent per share, outdoing the anticipated loss of three cents per share. Revenue stood at $175.00 million, exceeding the analyst-consensus estimate of $173.53 million, marking a 3.55% increase compared to sales of $169.00 million during the same period last year.

Projections from BlackBerry hint that fourth-quarter revenue will likely range between $150 million and $159 million, a drop from estimates of $200.37 million.

Treiber shed light on his concerns, citing dwindling investor visibility and the waning cash reserves of the company. This cash decline may necessitate BlackBerry to seek additional financing, expecting it to be expensive or dilute stocks.

Despite strong third-quarter Cybersecurity revenue (8% Y/Y to $114MM, aligning with consensus), the surge was attributed to a hefty license contract, Treiber noted.

Treiber remarked that corporate actions like the separation of IoT and Cybersecurity might create value, yet cast a shadow of uncertainty over BlackBerry’s future growth prospects.

As a result, Treiber revised the revenue estimates to $834.0 million (from $890.0 million) and EPS to $(0.01) from $(0.00) for FY24.

Further, the analyst altered the estimates for FY25 revenue and EPS to $638.1 million (from $724.9 million) and $(0.03) from $(0.07).

BB Price Action: BlackBerryΒ shares are down 14.02% at $3.53Β on the last check Thursday.

Read Next:Β Micron Technology Guidance Reflects Strong Pricing Rebound: 10 Analyst Deep Dive Into Q1 Earnings

Photo: Courtesy BlackBerry

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