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Blackberry Limited (TSX:BB) stock had a staggering start to 2021, with a triple-digit return in the month of January. But then, it witnessed a massive sell off last month.
Hence, the question arises, ‘what’s next for this Canadian software firm?’.
Let us glean at its recent performance on the back of business model transformation and budding retail investors’ interest in this stock.
Blackberry Limited (TSX:BB)
Shares of the Software-as-a-Service (SaaS) company zoomed to its 52-week high of C$ 36 on January 27.
This rally was driven by the three major catalysts, including its lawsuit settlement with Facebook Inc., a breakthrough collaboration with Amazon (AMZN:US or NASDAQ: AMZN), and Redditors’ meme-boosted frenzy.
As of March 3, the stock has declined by 64.36 per cent from its 52-week high and previously closed at C$ 12.83 per common share. But, when compared to its 52-week low of C$ 3.94, the stock is still up 225.63 per cent.
The company’s long-term goals into the software segment and its two sub-divisions, including SaaS and cybersecurity businesses, are encouraging. The could rebound, irrespective of recent retail investor craze.
BlackBerry will continue to play a big role in developing smart software systems for electric vehicles (EVs) and providing enterprise cybersecurity solutions. Demand of both products have soared in recently.
Investors are still closely tracking this reviving company, a former phone maker.
Its average volume for the last 30 days stands at 11 million. The market cap is C$ 6.93 billion, and the price-to-book ratio is 3.02.
Its year-to-date growth is 52.01 percent, higher than the entire technology sector, which gained 49.50 per cent YTD.
BlackBerry's Year-To-Date Stock Performance Chart. (Source: EODHD/Others)
It is always a hard call to give up one’s legacy, but BlackBerry has made a complete business rejig decision. The company is now focusing only on the software segment and discharging its hardware operations. It has sold nearly 90 patents to Chinese smartphone firm Huawei last month.
It reminds me of a quote from the legend economist John Keynes – “When the facts change, I change my mind.”
Here, the circumstance was that BlackBerry’s phone business faded away completely. Thus, the company has taken a genuine step to switch to software.
