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BB Jumps Ahead of Q1 Report

Fernanda Horner

The shares of BlackBerry Ltd (NYSE: BB) are up 2.3% at $5.18 at last check, after the company introduced BlackBerry AtHoc Managed Service, a solution that will allow organizations of various sizes to quickly establish and maintain crisis communication capabilities. The launch comes only two days ahead of BlackBerry's first-quarter earnings report, which is due after the close on Wednesday, June 24. Below, we will take a look at how the equity has been performing on the charts as of late, and explore some of the options activity surrounding BlackBerry stock ahead of the event.

While BB faced some hardship in mid-March when shares hit a 17-year-low of $2.70, the stock has been slowly climbing on the charts with consistent support at its 30-day moving average since mid-April. However, gains have been capped, for the most part, by overhead pressure at the 200-day moving average in the last two weeks. Still, the equity is showing signs of recovery, up 50% in the last three months. 

BB 30 200

The stock's recent price action hasn't been enough to convince analysts, which remain cautious of BB. Of the nine in coverage, all carry a tepid "hold" recommendation. Meanwhile, the 12-month consensus target price of $5.58 is an 8.03% premium to current levels. 

At last check, 9,468 calls and 1,524 puts have been exchanged -- in line with what is typically seen at this point. Most popular by far is the weekly 6/26 5.50-strike call, followed by the 6-strike put contract in the same series, with both positions set to expire this Friday.

A look at BB's history of post-earnings reactions during the past two years shows a mixed response. During its last eight reports, half of these next-day sessions were lower, including a 22% drop in September 2019. The security averaged a post-earnings swing of 12.4%, regardless of direction during the past two years. This time around, the options market is pricing in a slightly higher move of 15.2%.