What Do Analysts Think About BlackBerry Limited’s (TSE:BB) Growth?
Since BlackBerry Limited (TSX:BB) released its earnings in February 2018, it seems that analyst forecasts are fairly bearish, as BlackBerry is expected to become loss-making next year. However, this outlook is not unsubstantiated given the negative earnings growth rate over the past five years on average. Currently with a profit of US$405.00M, the consensus growth rate suggests that earnings will drop to -US$129.15M by 2019. Below is a brief commentary on the longer term outlook the market has for BlackBerry. Readers that are interested in understanding the company beyond these figures should research its fundamentals here. Check out our latest analysis for BlackBerry
Can we expect BlackBerry to keep growing?
Longer term expectations from the 13 analysts covering BB’s stock is one of negative sentiment. Given that it becomes hard to forecast far into the future, broker analysts tend to project ahead roughly three years. To get an idea of the overall earnings growth trend for BB, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.
This results in an annual growth rate of -112.57% based on the most recent earnings level of US$405.00M to the final forecast of -US$188.38M by 2021. This leads to an EPS of $-0.3 in the final year of projections relative to the current EPS of $0.76. The primary reason for earnings contraction is due to top-line expansion of 4.55%, which is predicted to lag cost growth leading up to 2021. With this high cost growth, margins is expected to contract from 43.45% to -17.09% by the end of 2021.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For BlackBerry, I’ve put together three fundamental aspects you should look at:
Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Valuation: What is BlackBerry worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether BlackBerry is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of BlackBerry? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
