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Stocks of BlackBerry Limited (TSX:BB) have gained 79 per cent this year. While some Wall Street analysts believe that this surge was motored by the meme stock rally, others think its business transition from hardware to software played a role in it.
The software stock, which has noted frequent mentions on Reddit-based day trading forums, has dropped 58 per cent from its one-year high of C$ 36 apiece (January 27) to C$ 15.10. In contrast, meme stocks like AMC Entertainment Holdings Inc. (AMC:US, NYSE:AMC) and GameStop Corporation (GME:US, NYSE:GME) have delivered as much as four-digit returns in one year.
While both these firms were affected by the pandemic-led lockdowns, BlackBerry saw collaborations with IBM and Amazon’s cloud service segment.
BlackBerry has also enhanced its cybersecurity solutions and artificial intelligence systems that have also attracted long-term equity investments. Once a classic mobile producer, it may now tap into the luxury and clean vehicle market through innovative operations.
BlackBerry Limited (TSX:BB)
The software stock has a market cap of C$ 8.55 billion. It has zoomed 128 per cent in one year. It has regained more than 159 per cent from its one-year low of C$ 5.82 apiece (October 02, 2020).
BlackBerry has witnessed a patchy meme-based rally compared to AMC and GameStop, which could be a good indicator for the Canadian firm in the long run.
Blackberry stock was trading in green pre-market on Tuesday, July 6. Its 10-day average trading volume has moderated to nearly four million shares against its 30-day volume of over nine million shares.
The company’s Software as a Service (SaaS) segment backlog revenue was up nine per cent year-over-year (YoY) to US$ 490 million in Q1 FY22, against a revenue of US$ 450 in Q1 FY21. The company has also reduced its outstanding debt. Its top line was US$ 174 million for the latest quarter.
The company held total cash of C$ 769 million in hand as of May 31, 2021.
BlackBerry Limited's one-year stock performance against moving average multiple. (Source: Refinitiv)
BB stock’s price trajectory is up against its long-term moving average multiple, showing a rising long-term investing. However, the stock has given up its meme-frenzied gains, representing short-term period moving average.
Advanced software tech investors have been ignoring meme-based buzz and focusing on the company’s fundamentals. During the first quarter, the company has brought TELUS, HERE, Geico, and Amazon on the BlackBerry IVY Advisory Council board to bolster next-generation tech innovation.
The above constitutes a preliminary view and any interest in stocks should be evaluated further from investment point of view.
