As of Mar 21, we maintain our Neutral recommendation on Research in Motion Limited (BBRY), ahead of its fourth quarter 2013 financial results.
Why Still Neutral?
Research In Motion has launched its much awaited BB10 OS-based Z10 and Q10 touch screen smartphones. The company has also generated a whopping order of 1 million handsets from one of its established carrier partners.
The new mobile device supports 70,000 apps and is based on a new user-friendly platform called QNX software or BB10 operating system, thereby offering strong resistance against the popular iOS and Android operating system.
Moreover, Research In Motion with its dedicated subscriber base of approximately 79 million coupled with strong cash position and a debt-free balance sheet will tend to act as tailwinds for the company going forward.
On the downside, we remain concerned about the company’s recent decision to change the business model of its high-margin services fees segment As per the new structure, the company will benefit from subscribers who opt for services like greater security while the other customers will generate little or no service revenue for the company.
Furthermore, BBRY is facing stiff competition from the other low-cost smartphone manufacturers, which we believe will continue to hurt profitability going forward.
Currently, Research in Motion has a Zacks Rank #3 (Hold).
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Research In Motion announced that effective January 30, 2013, the company would operate around the world under the name BlackBerry. From February 4, 2013, the company’s ticker symbol for trading has been changed from “RIMM” to “BBRY” on NASDAQ.
The legal name of the company has not changed, for which the approval of the official change by shareholders will be sought at the company's Annual General Meeting later in 2013. During the time, the company will do business as BlackBerry.Read the Full Research Report on BBRY
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