BlackBerry (BB) Stock Forecast & Price Target

BlackBerry's transition from hardware to a software-centric business model has resulted in strong financial performance, exemplified by a QNX gross margin increase to 83%, reflecting efficient cost management and robust demand. The company's total gross margins reached 75%, marking a 4% year-over-year improvement, indicating a solid foundation for profitability. Furthermore, projected revenues of $539 million for FY26 and $571 million for FY27, alongside increased EBITDA estimates of $111 million in FY27, underscore BlackBerry's positive revenue trajectory driven by its secure communications and embedded software segments.

BlackBerry's recent financial performance indicates a troubling trend, as revenue declined by 11% year-over-year, exacerbated by challenging comparisons due to a significant hardware refresh in the prior year. Furthermore, the gross margin for its Secure Communications segment has decreased to 66%, down 330 basis points quarter-over-quarter, highlighting potential issues with revenue mix and cost pressures. Additionally, the mid-point of future guidance suggests a slowdown in growth rates, with EBITDA projections indicating that margins may deteriorate in the second half of the fiscal year compared to the previous quarter.