Canadian tech company BlackBerry (TSX:BB)(NYSE:BB) has been one of the hottest buys on the market this year. As of last week, the stock was up an impressive 145% year to date, closing at a little under $13, though still down from its July high of $18.45. At a modest $7.5 billion market cap, many growth investors are increasingly bullish about its long-term potential. Could it double in value, again?
The primary catalyst driving this excitement is BlackBerry's QNX software. Trusted by major car manufacturers, QNX is embedded in over 275 million vehicles worldwide. Recently, QNX secured its largest contract yet: a $100 million deal with Coretura, a joint venture involving Daimler and Volvo. This deal features the Alloy Kore platform, which commands a selling price three times higher than QNX, opening up massive growth opportunities alongside new AI integrations.
Financially, the company is making solid progress. In its second quarter, revenue rose 26% year over year to $163 million. Impressively, it also posted its sixth consecutive quarter of positive GAAP net income. Full-year revenue growth is projected between 12% and 16%.
However, the stock may still not be slam dunk to soar in value. It currently trades at a steep premium of 48 times its forward earnings and nine times trailing revenue. Analyst sentiment reflects this hesitance, with seven holds and only two buy ratings among nine analysts, forecasting an upside of less than 17%.
While BlackBerry undeniably possesses promising opportunities, its current valuation already prices in plenty of future growth. It may double in value, but it could take a while for that to happen.
Tech Insider
