TD Cowen upgrades BlackBerry to Buy after solid Q3 print

Investing.com -- TD Cowen analysts upgraded BlackBerry (NYSE:BB) shares on Friday after the cybersecurity software firm delivered solid financial results for the fiscal third quarter a day earlier.

BlackBerry reported Q3 earnings per share (EPS) of $0.02, surpassing analyst expectations of a $0.01 loss.

Revenue for the period reached $162 million, also above the consensus estimate of $146.68 million.

The company’s Internet of Things (IoT) segment generated $62 million in revenue, marking a 13% year-over-year increase and beating the $58.5 million forecast.

Free cash flow for the quarter stood at $3 million, a notable improvement from negative $33 million in the same period last year and ahead of the estimated negative $7.57 million.

Cash and cash equivalents totaled $189 million, down 10% year-over-year but above the $157.9 million expected by analysts.

For the fiscal year 2025 (FY25), BlackBerry projects EPS in the range of a negative $0.02 to $0.00, compared to the consensus estimate of negative $0.01.

Annual revenue is projected to range from $517 million to $526 million, well below the $590 million analyst forecast.

TD Cowen analysts lifted their BlackBerry stock rating to Buy from Hold, highlighting “low valuation and significantly improved cashflow expectations.”

“While guidance and some KPIs suggest continued SC (Secure Communications) volatility, we cannot ignore the substantial improvement in the expected FCF generation from the entire business, which are likely helped by substantial NOLs from Cylance.”

The investment bank also lifted its price target on the stock to $4 from $3.25.