Talking Numbers

This chart spells doom for BlackBerry

Talking Numbers

This chart spells doom for BlackBerry

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This chart spells doom for BlackBerry

This chart spells doom for BlackBerry
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With BlackBerry, analysts either love it or hate it.

The Canadian smartphone maker received two downgrades in the past week. First came a "sell" rating by Societ General, which values sum of BlackBerry's parts at $6 per share. The company writes in its report:

"We are probably too early into the restructuring led by the relatively new CEO John Chen to see the full impact of the decisions recently taken…. Chinese competition is releasing Android handsets at extremely attractive prices into precisely these markets. And the focus on business users could also be a problem as companies are moving to BYOD (bring your own device) solutions. Therefore, we still consider that the most likely outcome is that Blackberry’s assets are sold separately. As we consider that, proceeds from such a sale should reach around $6 per share."

That was followed by a downgrade by Credit Suisse, which also values BlackBerry's shares at $6. However, Needham upgraded the stock from "underperform" to "hold".

Meanwhile, the company's latest earning numbers trounced Wall Street's expectations, though they were still at a loss and revenues were below what was anticipated. BlackBerry lost $0.08 per share (adjusted for one-time expenses) on revenues of $976 million for the most recent quarter. Analysts were expecting a loss of $0.57 per share on revenues of $1.1 billion. Last year at this time, BlackBerry's quarterly revenues were $2.7 billion.

(Read: BlackBerry wins court order against TV host Ryan Seacrest's Typo)

Though the stock is still up 10% this year, the negative calls on BlackBerry are sound for technical traders, according to Talking Numbers contributor Richard Ross, Global Technical Strategist at Auerbach Grayson.
"I'm seeing some ominous technical symmetry with a move that we made last year," say Ross. "It doesn't bode well for BlackBerry shares."

Ross sees a recent double top pattern that formed this year as being remarkably similar to a double top formed last summer. In the previous double top pattern, shares went from a high above $12 per share in August to below $6 by early January. With a break below the $9 per share "neckline" of last week of the most recent double top pattern, Ross believes a similar loss could be possible.

"That sets us up potentially for a retest of that old low around $6," says Ross. "From a purely technical standpoint [it's] very troublesome here in the short-term for BlackBerry. I don’t think you want to catch this falling knife right now."

(Watch: I would take $19 billion for BBM: BlackBerry CEO)

For CNBC contributor Gina Sanchez, founder of Chantico Global, BlackBerry is in a precarious position. On the one hand, she agrees with bullish analysts who see the company's future in software. On the other hand, Sanchez also believes the company will remain dependent on its handheld device business.

"BlackBerry has been the stock that just won't die," says Sanchez. "And, while the market definitely took the latest earnings announcement quite negatively, in fact, they're almost near break-even which, considering where we were a year ago is amazing.

However, according to Sanchez, those earnings are predicated on service fees for its smartphone sales.
"That really requires them to have continued new launches of new devices," says Sanchez. "That's the big question mark."

Sanchez believes parts of the company show promises, particularly its messaging software and its operating system for embedded systems, QNX, which even powers Apple's CarPlay.

"I think BlackBerry's best bet is to try and reinvent themselves as a software company – QNX, BlackBerry Messenger – that's really where the value is," says Sanchez. "But it's still not enough to make up for the fact that they're still making a lot of their revenues off of those backend service fees."

To see the full discussion on BlackBerry with Ross on the technicals and Sanchez on the fundamentals, watch the video above.

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