Earnings Calendar (31 Mar 2025)
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I am interested in BlackBerry's and RGP's upcoming earnings.
Let us look at BlackBerry in detail.
The stock price rose by 42% from a year ago. Technical Analysis has a “Strong Sell” recommendation for the stock.
Here is an analysis of Blackberry with the help of GROK:
Revenue
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Growth Trend: BlackBerry's revenue has significantly declined over the decade, dropping from $3.335 billion in 2015 to $853 million in 2024. The 10-year compound annual growth rate (CAGR) for revenue is a negative 18.8%, reflecting a steep contraction.
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Key Milestones: Revenue saw sharp declines, particularly in 2015 (-51.0%), 2016 (-35.2%), and 2017 (-39.4%). There were brief periods of growth, such as 15.0% in 2020, but the overall trend is downward, with an 8.6% drop in 2023 and a 30.0% increase in 2024.
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Competitive Advantage: The consistent revenue decline indicates BlackBerry's struggle to maintain its market position after pivoting from hardware (smartphones) to software and cybersecurity. However, the 2024 revenue growth suggests potential stabilization in its new focus areas.
Operating Profit
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Growth Trend: Operating profit has been negative for most of the decade, with a loss of -$174 million in 2015, worsening to -$458 million in 2016, and peaking at -$66 million in 2020. By 2024, the operating loss was -$72 million.
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Operating Margin: The operating margin has remained deeply negative, ranging from -5.2% in 2015 to -34.1% in 2023, improving slightly to -8.4% in 2024. This reflects ongoing challenges in achieving profitability.
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Competitive Advantage: BlackBerry’s persistent operating losses highlight its struggle to achieve operational efficiency in its new software-focused business model. However, the slight improvement in 2024 may indicate early signs of cost management or revenue stabilization.
Earnings Per Share (EPS)
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Growth Trend: EPS has been volatile and mostly negative, starting at -$0.58 in 2015, peaking at $0.74 in 2018, and dropping to -$0.22 in 2024. The 10-year EPS CAGR is not provided, but growth rates show extreme fluctuations, such as 127.4% in 2017 and -335.5% in 2022.
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Volatility: EPS has been inconsistent, with significant declines (e.g., -100.0% in 2019) and brief periods of positive earnings (e.g., 2018). The negative EPS in 2024 reflects ongoing profitability challenges.
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Competitive Advantage: The lack of consistent EPS growth indicates BlackBerry’s difficulty in generating shareholder value during its business transition. However, its focus on high-growth areas like cybersecurity and IoT may offer long-term potential.
Price-to-Earnings (P/E) Ratio
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Valuation: The P/E ratio is negative at -18.2, reflecting the 2024 earnings loss. This suggests market uncertainty about BlackBerry’s ability to return to profitability.
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10-Year Median Returns: The 10-year median return on assets (ROA) is -4.1%, return on equity (ROE) is -5.2%, and return on invested capital (ROIC) is -4.8%, indicating poor historical returns.
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Competitive Advantage: The negative P/E and returns highlight BlackBerry’s challenges in generating value. However, its low P/B (3.2) and P/S (3.4) ratios suggest the market may see some underlying value in its assets and revenue potential.
Free Cash Flow (FCF)
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Growth Trend: The EV/FCF ratio is -51.1, indicating negative free cash flow, and the 10-year CAGR for FCF is not provided but is likely negative, given the company’s financial struggles. The 10-year median FCF margin is 4.8%, suggesting some periods of positive cash flow.
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Capital Structure: The median debt/equity ratio is 0.3, and debt/assets is 0.2, reflecting a conservative approach to leverage.
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Competitive Advantage: Negative FCF limits BlackBerry’s ability to fund growth without external financing. However, its low debt levels provide financial flexibility to navigate its transition.
Other Key Metrics
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Gross Profit and Margin: Gross profit declined from $1.604 billion in 2015 to $520 million in 2024, but the gross margin remained strong, improving from 48.1% in 2015 to 61.0% in 2024. The 10-year median gross margin is 64.5%, reflecting a high-margin software business.
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Return on Invested Capital (ROIC): ROIC has been mostly negative, ranging from -5.9% in 2015 to -11.4% in 2024, with a brief peak at 13.6% in 2018. The 10-year median ROIC is -4.8%, indicating poor capital efficiency.
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Competitive Advantage: The high gross margin is a key strength, reflecting BlackBerry’s successful pivot to a software model with higher profitability potential. However, the negative ROIC underscores challenges in scaling this model profitably.
Overall Assessment
Over the past 10 years, BlackBerry has faced significant challenges, with revenue declining at a -18.8% CAGR as it transitioned from a hardware-focused company to a software and cybersecurity provider. Operating profits and EPS have been consistently negative, reflecting the difficulty of this pivot, and the company does not pay dividends, focusing instead on reinvestment. The negative P/E ratio (-18.2) and ROIC (-11.4% in 2024) highlight ongoing profitability struggles, but the high gross margin (61.0% in 2024) and low debt levels (debt/equity of 0.3) suggest potential for recovery. BlackBerry’s competitive advantages lie in its high-margin software business and its focus on growing sectors like cybersecurity and IoT, but it has yet to translate these into consistent financial performance.
The forecast for EPS and revenue are 0.003 and $129.26M, respectively. The recent performances are underwhelming and I prefer to monitor the stock for now.
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