Why BlackBerry Stock Is an Investor Time Bomb

John Chen, the CEO of BlackBerry (NYSE:BB), is highly optimistic about the company, but that’s to be expected. Unfortunately for BB stock investors, BlackBerry’s fiscal data doesn’t show that the company is successfully transitioning into a modern technology business of the 2020s.

It feels like a million years ago that former President Barack Obama had a BlackBerry phone with the little keyboard. Smartphones were gaining popularity, and today’s 5G connectivity was only a dream.

Today, it’s not 2009 anymore and BlackBerry has failed as a phone seller. The company is trying hard to rebrand and reimagine itself as strong competitor in the areas of cybersecurity and the Internet of Things.

This strategy hasn’t worked out well for the shareholders, though, and BlackBerry’s financial results don’t bode well for the company and its investors.

What’s Happening With BB Stock?

Whether you choose a one-year, five-year or 10-year look-back period, BB stock isn’t just down; it’s demolished. At this rate, BlackBerry’s investors should be glad to get through 2023 above $3, not to mention $4 or $5.

BlackBerry’s chief executive is a good hype man and promoter of his company. That’s part of his job, but as a cautious investor, you don’t have to share Chen’s enthusiasm.

Even as Chen touts BlackBerry’s “large government deals,” it’s in the context of less-than-stellar news. As the CEO reported, BlackBerry’s Cybersecurity unit “saw the timing of a number of large government deals slip into later quarters.”

Certainly, this isn’t something to celebrate.

Chen also bragged about BlackBerry’s “design wins,” but moving from design achievements to successful commercialization isn’t guaranteed.

As we’ll see in a moment, Chen’s apparently “clear focus” on “driving … profitable growth” might not be so clear, after all.

BlackBerry Swings to an Earnings Loss

BlackBerry’s CEO can brag if he wants to, but investors should pay close attention to the company’s financial figures. There’s little to no data in Blackberry’s most recent quarterly report to suggest that the company’s business transition is successful.

Starting with the top line, BlackBerry’s revenue during the fourth quarter of fiscal 2023 (which ended Feb. 28, 2023) totaled $151 million. That’s an 18.4% decline on a year-over-year basis. It’s also 12.3% below the analyst consensus estimate for BlackBerry’s quarterly revenue.

Turning to the bottom line, BlackBerry reported an eye-watering $495 million net earnings loss in Q4 FY2023. This translates to a net loss of 85 cents per share, which is brutal when the BlackBerry share price is around $4.

This result is even more alarming when we consider that BlackBerry had net income of $144 million in the year-earlier quarter. Moreover, BlackBerry reported a decrease in cash and cash equivalents from $378 million as of Feb. 28, 2022, to $295 million a year later.

There’s No Need to Bet on BB Stock

It might sound harsh to say this. However, the truth is that BlackBerry’s revamped business is unproven in 2023. Sure, the company’s chief executive has positive things to say about BlackBerry. Yet, the company’s results tell a less encouraging story.

BlackBerry had clout and success in 2009. However, the technological landscape has changed dramatically since then. Nowadays, there are plenty of profitable, publicly listed tech firms to choose from. Therefore, there’s no need to place a risky bet on BB stock now.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.