Yahoo Finance BlackBerry (BB) Outlines Long-Term Goals: Key Highlights
BlackBerry BB recently outlined its long-term financial targets, which include achieving full-year positive non-GAAP earnings per share as well as cash flow beginning in fiscal 2025.
Management expects total revenues in the range of $665-$700 million for fiscal 2024 compared with revenues of $624 million delivered in fiscal 2023. BB is targeting revenues in the $880-$960 million band for fiscal 2026. The three-year average CAGR is anticipated to be between 12% and 15%.
The company also expects non-GAAP gross margin per year to increase more than 200 basis points (bps), on average, to fiscal 2026. It is anticipating to deliver considerable improvements in non-GAAP EPS loss and cash flow usage in fiscal 2024. By the fourth quarter of fiscal 2024, BB expects to achieve non-GAAP profitability.
Following the announcement, shares are up 2% in the premarket trading on May 18. Shares of BB have lost 10.5% of their value compared with the sub-industry’s growth of 23.5% in the past year.
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Segment Details
For IoT business (excluding IVY), revenues are projected in the range of $240-$250 million and $340-$370 million for fiscal 2024 and fiscal 2026, respectively. The three-year average CAGR is estimated in the range of 18-22%.
Blackberry noted that development seats and professional services (design phase revenue) generated 20% each of its QNX's revenues. The remaining 60% of the top line came from production-based royalties or production phase revenues, based on long term average.
Owing to new design wins in fiscal 2023 and macroeconomic headwinds for production-based royalties, design phase is currently contributing greater percentage to the top line relative to production phase revenues, than the long-term average, added BlackBerry.
IoT revenues will be driven by a robust QNX royalty backlog. BlackBerry is focusing on securing additional IVY design wins in fiscal 2024.
For Cybersecurity business, revenues are estimated in the range of $425-$450 million and $540-$590 million for fiscal 2024 and fiscal 2026, respectively. The three-year average CAGR is anticipated to be between 9% and 12%. BlackBerry expects growth in total addressable market, endpoint security market and managed security services market to drive its Cybersecurity business.
BlackBerry Limited Price and Consensus
BlackBerry Limited price-consensus-chart | BlackBerry Limited Quote
Segmental gross margin is anticipated to improve 400-600 bps by fiscal 2026. Annual recurring revenues are expected to return to sequential growth in the second half of the current fiscal year while Total Contract Value billings are estimated in the range of $430-$480 million.
Headquartered in Waterloo, Canada, BlackBerry provides intelligent security software and services to enterprises and governments worldwide. It offers devices and software platforms for managing security, mobility and communications among hardware, programs, mobile apps and the Internet of Things.
At present, BlackBerry carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks in the broader technology space are Badger Meter BMI, Simulations Plus SLP and Blackbaud BLKB. BMI sports a Zacks Rank #1 (Strong Buy) whereas SLP and BLKB currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Badger Meter’s 2023 earnings has increased 4.7% in the past 60 days to $2.69 per share. BMI’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 5.3%. Shares of BMI have surged 79.4% in the past year.
The Zacks Consensus Estimate for Simulations Plus’ fiscal 2023 earnings has improved by 1 cent in the past 60 days to 66 cents per share. Shares of SLP have lost 5.7% in the past year.
The Zacks Consensus Estimate for Blackbaud’s 2023 earnings is pegged at $3.68 per share, up 7.3% in the past 60 days. The long-term earnings growth rate is anticipated to be 10.4%.
Blackbaud’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 10.4%. Shares of BLKB have increased 20.6% in the past year.
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