Vodafone Gives BlackBerry (TSX:BB) Stock a Huge Vote of Confidence

Vodafone Group (NASDAQ:VOD) just signed an agreement to launch BlackBerry Ltd. (TSX:BB)(NYSE:BB) products to secure its internal data.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Vodafone Group (NASDAQ:VOD) made a big move last week when it chose BlackBerry Ltd. (TSX:BB)(NYSE:BB) to protect critical internal data. It’s a vote of confidence as BlackBerry looks to secure bigger partners for its new cybersecurity software products.

In a press release, the companies announced an “expanded partnership with Vodafone to offer BlackBerry AtHoc as its emergency alert and crisis communications solution.”

The reason Vodafone chose BlackBerry was simple: security. “We are delighted to add BlackBerry AtHoc to our portfolio of security solutions. It will help customers such as Greater Manchester Police and Fire connect with their frontline staff quickly and securely,” a Vodafone representative said.

This may seem like a one-off announcement, but it’s not. Deals like this suggest big things ahead for BlackBerry stock.

A whole new world

BlackBerry isn’t the company it used to be. In 2008, it held a 20% global market share for smartphones. Today, that share is close to 0%. In fact, the company didn’t product a single phone last year.

If BlackBerry isn’t a phone company, what exactly does it do?

As the Vodafone deal shows, the company has already gained promising traction for its new business: cybersecurity software. It has spent years developing one of the best product suites in the industry. Its Cylance division, for example, uses artificial intelligence to detect and thwart attacks before they occur!

Capabilities like Cylance are integrated in all of BlackBerry’s products. It has solutions for the internet-of-things, big data, healthcare, self-driving vehicles, enterprise security, and much more. BlackBerry can protect any device that’s vulnerable to hacking.

Vodafone isn’t the only deal in place. The company’s QNX platform is already installed in nearly 200 million cars worldwide. This tech stock has been making continuous progress launching its software, but as we’ll see, the market has been slow to reward this traction.

BlackBerry stock is ready

What would you pay for a tech stock that owns some of the most advanced cybersecurity software in existence? Let’s take a look at the peer group. Crowdstrike trades at 38 times sales. Palo Alto Networks trades at 7.5 times sales. ANSYS Inc trades at 18 times sales.

This peer group is pricey, but for good reason. Cybersecurity products have fantastic margins, high retention rates, and are benefiting from multi-year growth tailwinds. The number of connected devices proliferates on a daily basis. Billions of new endpoints need to be secured every year. This is simply one of the biggest opportunities this decade.

Where does BlackBerry stock stand in all of this? Shares trade at just 3 times sales! That’s a 70% to 90% discount to the industry.

This discount likely stems from two factors. First, the market hasn’t caught on to BlackBerry’s new business model. Many investors still view the company as a hardware manufacturer. Second, BlackBerry is at the start of its sales launch. That means early investors can take advantage of the risk-reward balance.

As sales ramp, expect the valuation discount to narrow quickly. That could lead to 500% upside or more. Early investors in BB stock will experience the most long-term upside.

Should you invest $1,000 in OpenText right now?

Before you buy stock in OpenText, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and OpenText wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $18,750.10!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 35 percentage points since 2013*.

See the Top Stocks * Returns as of 1/22/25

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

The Motley Fool owns shares of and recommends Palo Alto Networks. The Motley Fool recommends BlackBerry and BlackBerry. Fool contributor Ryan Vanzo has no position in any stocks mentioned.

If You Thought Apple and Microsoft Were Big, You Need to Read This.

The steel industry produced the world's first $1 billion company in 1901, and it wasn't until 117 years later that technology giant Apple became the first-ever company to reach a $1 trillion valuation.

But what if I told you artificial intelligence (AI) is about to accelerate the pace of value creation? AI has the potential to produce several trillion-dollar companies in the future, and The Motley Fool is watching one very closely right now.

Don't fumble this potential wealth-building opportunity by navigating it alone. The Motley Fool has a proven track record of picking revolutionary growth stocks early, from Netflix to Amazon, so become a premium member today.

See the 'AI Supercycle' Stock

More on Tech Stocks

think thought consider
Tech Stocks

Where Will Celestica Stock Be in 3 Years?

Here’s why I wouldn’t be surprised if Celestica stock maintains its solid upward trajectory over the next three years.

Read more »

Investor wonders if it's safe to buy stocks now
Tech Stocks

Billionaires Are Dropping Apple Stock and Buying This TSX Stock in Bulk

Let's be clear: there's nothing wrong with Apple stock. But investors may not get the value they can from this…

Read more »

data center server racks glow with light
Tech Stocks

OpenText Stock: Buy, Sell, or Hold in 2025?

OpenText is a TSX tech stock which trades at a cheap multiple while offering a tasty yield to shareholders in…

Read more »

Income and growth financial chart
Tech Stocks

This TSX Stock Has Already Soared 151%: Can it Double in 2025?

Whether MDA stock doubles again in 2025 will depend on consistent execution and broader market conditions, but it certainly seems…

Read more »

e-commerce shopping getting a package
Tech Stocks

Opinion: This Is the Only TSX Growth Stock to Own for the Next 5 Years

Here's why Shopify (TSX:SHOP) looks like a top growth stock worth owning over the next five years on a relative…

Read more »

Man holds Canadian dollars in differing amounts
Tech Stocks

The Smartest TSX Stock to Buy With $500 Right Now

D2L is a TSX tech stock that is growing revenue and cash flow at a steady pace, enabling it to…

Read more »

The virtual button with the letters AI in a circle hovering above a keyboard, about to be clicked by a cursor.
Tech Stocks

Missed Out on Nvidia? My Best AI Stocks to Buy and Hold

Missed Nvidia stock’s blazing growth? Discover Paylocity (NASDAQ:PCTY) and another AI growth stock poised for long-term gains

Read more »

Canada day banner background design of flag
Tech Stocks

Invest in These 3 Unstoppable Canadian Stocks for the Next Decade

Looking for some Canadian stocks that could continue an unstoppable upward trajectory? Here are three to look at for 2025.

Read more »