If you’re like me, you’re looking for some relief from the carnage that we have seen and felt in the markets. Even those of us who are not fully invested in equities have taken a hit. So why would you consider investing in a company like Blackberry Ltd. (TSX:BB) – one that has been struggling for many years now and remains quite fragile?
The answer lies in Blackberry’s outlook. Is it strong enough and secure enough to warrant buying Blackberry stock today? Let’s take a look.
Uncertainty equals volatility
Volatility is something that Blackberry shareholders have gotten used to. So, when we see the stock tanking, we know that this is what we signed up for. A company like Blackberry, which has been transforming its business for what seems like eons, is by its very nature, volatile.
The reasons that investors like me own it are for the promise of its technology. So, we close our eyes to the hits as long as the long-term plan and strategy remain intact. This is what I have done. Yes, I’ve been losing money. But, the stock is part of my diversified portfolio that allows room for high risk/ high potential reward stocks like Blackberry.
This is what we get when we buy a stock like Blackberry. It’s not easy, but it is the path – hopefully, the path to very lucrative returns in the future.
Blackberry’s QNX is driving the excitement
The value of Blackberry’s automotive software cannot be understated. In fact, the connected car market is growing exponentially. This is being driven by consumer demand for constant connectivity as well as safety and security goals.
While in the short term, growth in Blackberry’s QNX business has been disappointing, the interest in Blackberry’s software is strong. This is evidenced in QNX’s backlog of $865 million – a sign that the future of the business is looking good.
But in the short term, automotive manufacturers are scaling back on certain programs, the effect of economic uncertainty and now, tariffs. This is certainly a problem today. Yet, the trend toward connected cars is here to stay. And this is what I’m focusing on as a shareholder of Blackberry stock.
Also, it bears mentioning that Blackberry is increasing efforts to pursue greater market penetration of its software in other verticals. The medical and industrial industries also have a need for Blackberry’s machine-to-machine connectivity. The company already serves these industries but the plan is to pursue greater market penetration, which will provide additional growth and diversification for the company.
Profitability for Blackberry – finally
I’m also focused on Blackberry’s new management and the progress they are making toward profitability. This was on full display in the company’s fourth quarter and year-end fiscal 2025 results.
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) came in at $21.1 million. This represents a 15% margin and came in above expectations. Also, Blackberry’s operating cash flow came in at $57 million. This was also above expectations and it compares very favourably to prior years of losses.
The bottom line
While the macro-economic environment is pretty uncertain and downright scary these days, keeping our eyes on the potential that Blackberry offers can help us remain calm. In the short term, the company has a good cash balance to see it through to brighter days.
