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Why BlackBerry Limited (TSE:BB) Could Be Worth Watching

Simply Wall St
·3 min read

While BlackBerry Limited (TSE:BB) might not be the most widely known stock at the moment, it led the TSX gainers with a relatively large price hike in the past couple of weeks. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Today I will analyse the most recent data on BlackBerry’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for BlackBerry

What is BlackBerry worth?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 12.95% above my intrinsic value, which means if you buy BlackBerry today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is CA$6.77, then there isn’t really any room for the share price grow beyond what it’s currently trading. In addition to this, BlackBerry has a low beta, which suggests its share price is less volatile than the wider market.

What kind of growth will BlackBerry generate?

earnings-and-revenue-growth
earnings-and-revenue-growth

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 91% over the next couple of years, the future seems bright for BlackBerry. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? It seems like the market has already priced in BB’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on BB, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

It can be quite valuable to consider what analysts expect for BlackBerry from their most recent forecasts. So feel free to check out our free graph representing analyst forecasts.

If you are no longer interested in BlackBerry, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.