Is Blackberry the Best Cybersecurity Stock on the TSX?

Blackberry Ltd. (TSX:BB)(NYSE:BB) has made waves over the past year but it has work to do in the cyber security sector.

| More on:

When this year started, I’d discussed how Canadians could look to invest in the cyber security space. Blackberry (TSX:BB)(NYSE:BB) was toppled from its perch atop the smartphone market in the early 2010s by the emergence of the iPhone and Android alternatives. Over the last decade, Blackberry has transitioned to a software-focused company. Its progress has been very encouraging at times, though there are still burning questions that have negatively impacted the stock. Is this the best cybersecurity stock to snag on the TSX?

This year has been a roller coaster for this top TSX stock

Blackberry’s wild ride in late 2020 and early 2021 started last December. The company announced its collaboration with Amazon Web Services to accelerate automobile software innovation with Blackberry IVY. This generated considerable excitement and some analysts saw it as a sign that the Waterloo-based company was primed to step into the big leagues. Indeed, its QNX software is already embedded in over 175 million vehicles around the world.

This late 2020 announcement sparked a run for Blackberry stock. However, it kicked into overdrive in the opening months of 2021. Shares surged to a 52-week high of $36.00 before quickly retreating in late January. It found itself embroiled in the social media stock frenzy that propelled stocks like GameStop, AMC Entertainment, and Nokia. However, volumes have appeared to normalize in the months since.

Blackberry’s volatility may have put off some onlookers to start this year. Should they be optimistic about its prospects in the cyber security sector?

Why Blackberry has work to do in the cybersecurity space

In October 2020, the company unveiled the Blackberry Cyber Suite. This was billed as the industry’s first, comprehensive, AI-powered unified endpoint security (UES) solution. The former hardware giant bolstered its AI capabilities with the 2019 acquisition of Cylance. Blackberry has won some promising private and public contracts in its shift to software, but it still has some heavy lifting to do in this space.

Companies like Okta have made major strides in recent months. Meanwhile, CrowdStrike Holdings and Palo Alto Networks have been able to snag high-level contracts as the demand for digital protection heightens. The cyber security market is geared up for big growth in the years ahead. Of course, there is also intense competition in this sector. Blackberry remains a middling player compared to these heavy hitters.

Should you buy Blackberry stock right now?

The company released its fourth quarter fiscal 2021 results on March 30. It announced that Blackberry QNX had designs wins with 23 of the world’s top 25 EV Electric Vehicle OEMs – combined for 68% of the total EV market. Blackberry sold off some of its mobile patents in late 2020, sparking some controversy due to the purchaser. It revealed that hit will continue to pursue the sale of mobile patents in the quarters to come as it drifts further away from its claim to fame.

Blackberry is still on track for strong earnings growth. However, it lags the big dogs in the cybersecurity space. Its value has leveled out after a red-hot start to 2021. This stock is still a solid stash for the long term.

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.

Fool contributor Ambrose O'Callaghan has no position in any stocks mentioned.  

More on Investing

Canadian dollars are printed
Dividend Stocks

Beat the TSX With This Cash-Gushing Dividend Stock

Toronto-Dominion Bank (TSX:TD) stock could do well in the year ahead.

Read more »

monthly desk calendar
Dividend Stocks

Monthly Income: Top Dividend Stocks to Buy in November

Here are two of the best monthly dividend stocks in Canada you can buy in November 2024 and hold for…

Read more »

hand stacks coins
Investing

A Top TSX Stock to Buy Now for Real Wealth Later

Intact Financial (TSX:IFC) stock is a fantastic dividend-growth play for the next 15 years and beyond.

Read more »

tsx today
Stock Market

TSX Today: What to Watch for in Stocks on Thursday, November 14

The U.S. wholesale inflation data and Fed chair Jerome Powell’s remarks about the economy will remain on TSX investors’ radar…

Read more »

Man data analyze
Tech Stocks

3 Reasons Celestica Stock Is a Screaming Buy Now

These three reasons make Celestica stock a screaming buy for long-term investors.

Read more »

profit rises over time
Dividend Stocks

These 2 Dow Stocks Are Set to Soar in 2025 and Beyond

Two Dow Jones stocks are screaming buys but Canadians must hold them in an RRSP or RRIF to avoid paying…

Read more »

TFSA (Tax free savings account) acronym on wooden cubes on the background of stacks of coins
Dividend Stocks

How to Use Your TFSA to Earn Ultimate Passive Income

If you have a TFSA, then you have the key to creating ultimate passive income. All you need is a…

Read more »

Confused person shrugging
Dividend Stocks

Better Buy: Fortis Stock or Hydro One Stock?

Let's do a compare and contrast of these two top utilities stocks right now, shall we?

Read more »