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BlackBerry Ltd (BBRY) Isn’t Worth $4 Billion as Software Business: Credit Suisse

Blackberry ltd NASDAQ:BBRY

Credit Suisse analyst Kulbinder Garcha reiterated an ‘underperform’ rating on BlackBerry Ltd and set a target price of $6. Garcha dubbed the Canadian tech giant a just another software business, which is not worth $4 billion, according to a report from Street Insider.

The tech giant has decided to stop making devices, and shift focus on software and security. It plans to focus on software and internal workings that go inside the device. The company’s partners will manufacture BlackBerry branded mobile devices.

BlackBerry Focusing on Software and Mobile Security Business

BlackBerry has a market cap of $4 billion. The Canadian tech giant is looking to conquer the software and mobile security market. Letting go of hardware will enable the company to build itself into a formidable software giant.

Garcha believes that the firm will completely close its hardware business. The analysts expects the company to generate $850 million in software revenue in the year FY19.

The Canadian tech company is also planning to conquer several new markets. Its newest interest lies in healthcare and medical technology.

BlackBerry Ltd holds expertise in securing the software and communications of multiples governments and global businesses. The firm has 70 approvals and certifications with all of the G7 governments. It holds a similar relationship with 16 members of the G20. The top 5 largest managed investment entities, oil, gas and healthcare companies trust the company to encrypt their software. In addition to all of those, the top 10 global banks and law firms do the same.

Last month, BlackBerry signed a software deal with Ford Motor. Under the agreement, the smartphone maker will work directly with Ford to expand use of its QNX automotive software in the automaker’s vehicles. The company’s QNX software powers more than 60 million vehicles, including the SYNC 3 Infotainment system in Ford’s current models. As part of the agreement, BlackBerry will dedicate a team to work with Ford on expanding the use of QNX Neutrino Operating System, Certicom security technology, QNX hypervisor and QNX audio processing software.

Shares of BlackBerry are down 17.78% for the year. The stock has lost 1.68% during the past 12 months.

BlackBerry’s Final Smartphone

The company recently introduced DTEK 60, its second device in the DTEK Android phone series. The phone features a 21 MP rear and 8 MP front cameras, 3000 mAh battery, 5.5-inch display and 4GB RAM.

According to a report from Forbes, the firm is now working on a third Android device for 2016, potentially called the DTEK70.

The leaked images of the phone published on the Chinese social network Weibo suggests that the handset echoes the physical keyboard seen on last year’s debut Android handset, the BlackBerry Priv. Sitting above the screen is a substantive forward-facing camera. Previous leaks showed a device with a 4.5 inch HD screen, a SnapDragon 625 system on chip architecture, 3GB of RAM, and USB-C connectivity.

According to the report, the DTEK70 is unlikely to be the last smartphone with the BlackBerry name on it, but it will be the last where the hardware has direct input from the company.

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Adam Green is an experienced writer and fintech enthusiast. He he worked with LearnBonds.com since 2019 and covers a range of areas including: personal finance, savings, bonds and taxes.

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