BlackBerry Stock Has Skyrocketed Nearly 100% in 6 Months: Is It Too Late to Buy?

Shares of tech company BlackBerry (NYSE: BB) have been falling in recent days, but it has been a tremendous stock to own in the past six months, nearly doubling in value over that stretch and hitting a new 52-week high along the way. There's growing excitement around the business, as it announced some promising results late last year, and that has helped fuel the stock's rally.

BlackBerry, once known for being a top cellphone maker, stopped making its own phones in 2016 as it struggled in the market amid heightened competition. In an effort to transform its operations, it now focuses on making software and providing businesses with cybersecurity solutions.

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Below, I'll take a look at its recent financials and assess how the business is doing, to determine if now could be an ideal time to invest in this hot tech stock, or if investors are better off passing on it.

There's reason for optimism, but there's still risk too

A big catalyst for BlackBerry came in December, when the company reported its third-quarter numbers for fiscal 2025 (ended Nov. 30, 2024). Not only did it exceed its revenue targets for its cybersecurity and Internet of Things (IoT) segments, it also boosted the lower end of its full-year guidance for IoT. Plus, it reported free cash flow, which came earlier than expected for the company.

However, for investors, it's always important to look at the longer-term picture. Over the past three quarters, BlackBerry's top line has actually declined by 35% to $391 million. Its operating income over that timeframe has totaled $7 million -- far less than the $25 million it posted over the same period last year.

Cash flow, meanwhile, can fluctuate, and while it was positive during the most recent three-month period, the company has burned through $25 million over the course of its day-to-day operations in the last nine months. If you look a bit more closely at the numbers, the results are not nearly as impressive as they appear to be at first glance.

BlackBerry recently dumped an acquisition for a huge loss

In 2018, BlackBerry announced plans to acquire artificial intelligence (AI) cybersecurity company Cylance for $1.4 billion. The move was supposed to complement BlackBerry's entire portfolio, potentially generating significant growth in the years ahead. But fast forward to 2024, and the deal appeared to no longer be as promising. In December, BlackBerry announced that it would be selling Cylance to another AI company, Arctic Wolf, for just $160 million, plus 5.5 million shares of the business.

It's a concerning sign for BlackBerry that it wasn't able to incorporate Cylance into its operations more effectively, and that it proved to be such a poor allocation of capital. While BlackBerry will benefit from Cylance's potential growth by having a position in Arctic Wolf, it's a disappointing development for the company and underscores its struggles in recent years.

Investors shouldn't rush to buy BlackBerry stock

BlackBerry is a highly volatile stock. While it may look like a hot buy right now, investors shouldn't forget that it's still down 17% over a five-year period, even when factoring in this recent surge. The company has struggled to generate any sustainable growth, and while it seemingly has opportunities in IoT and cybersecurity, they haven't materialized and resulted in significantly stronger financials.

This is a stock that may be intriguing to watch, but it can put you on a roller-coaster ride due to its occasional wild swings (it soared in 2021 amid the hype in meme stocks only to crash later on), as this is a fairly speculative investment. BlackBerry's fundamentals need a lot of work before this can be a suitable option for the majority of investors. There are many better growth stocks to consider than BlackBerry -- it simply isn't worth the risk.

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David Jagielski has no position in any of the stocks mentioned. The Motley Fool recommends BlackBerry. The Motley Fool has a disclosure policy.