Should You Hold or Sell BlackBerry Stock Before Q1 Earnings Release?

BlackBerry Limited BB is set to report first-quarter fiscal 2026 results on June 24.The Zacks Consensus Estimate is pegged at breakeven and has remained unchanged in the past 60 days. In the prior-year quarter, the company reported a loss of 3 cents per share.BB expects fiscal first-quarter 2026 revenues to be in the $107-$115 million range.The company has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 93.75%.Image Source: Zacks Investment ResearchWhat Our Model Predicts for BBOur proven model does not conclusively predict an earnings beat for BlackBerry this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But, that is not the case here. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.BB has an Earnings ESP of 0.00% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.Factors to Focus on Ahead of BB’s Q1 EarningsBB’s performance is expected to have benefited from strength in the QNX segment (former IoT division), particularly solid demand for its solutions across the advanced driver assistance systems market and digital cockpit domains. Increasing traction for its next-generation version of QNX operating system SDP 8.0 (across automotive, rail medical, industrial and robotic verticals) as well as the QNX Cabin (digital cockpit development) solution augurs well.Earlier in the year, QNX and Microsoft MSFT partnered to aid automakers in building, validating and refining software within the cloud to power the evolution of SDVs. The partnership will bring the QNX Software Development Platform 8.0 to Microsoft Azure, offering automakers a comprehensive cloud-based environment to accelerate innovation while reducing development risks. Also, QNX and Microsoft plan to extend their collaboration to include the QNX Hypervisor and the QNX Cabin.Healthy revenues from royalties and development seat licenses are likely to have acted as tailwinds. BB’s focus on go-to-market penetration, especially in adjacent automotive verticals, bodes well. Earlier in the year, BB launched its QNX General Embedded Development Platform to speed up time to market for scalable and secure embedded systems.The Secure Communications division's performance is likely to have been driven by healthy uptake of the SecuSmart, UEM endpoint management and AtHoc critical event management solutions. The sale of Cylance and extensive cost restructuring are aiding the performance of this particular division.BlackBerry Limited Price and EPS Surprise BlackBerry Limited price-eps-surprise | BlackBerry Limited QuoteIn February 2025, BlackBerry sold its Cylance endpoint security assets to Arctic Wolf. BB has successfully achieved its initial target of cutting back roughly $150 million from its run rate.  For the quarter to be reported, the company expects adjusted EBITDA to be between breakeven and $7 million.  For the Secure Communications unit, BlackBerry expects revenues to be in the band of $50-$54 million. Licensing & Other revenues are expected to be roughly $6 million. For the QNX business, revenues are expected to be in the range of $51-$55 million.Affected by a volatile automotive backdrop, the company anticipates a sequential drop in QNX revenues from $65.8 million. In the last earnings call, management highlighted that due to recent tariff changes, especially on automotive goods, BlackBerry is currently unsure how this will affect its business. While BB does not expect a direct impact on its products and services, there may be indirect effects like supply-chain disruptions and changes in demand.BlackBerry is taking a cautious stance on the Secure Communications division due to ongoing turmoil in its core government markets. The potential impact of DOGE and other shifts within the U.S. administration, as well as political changes in Canada, Germany and other regions, are likely to create a challenging and unstable environment.While significant effects are yet to be seen, the situation remains unpredictable. These developments could lead to short-term disruptions for the business. BlackBerry also faces increasing competitive pressure in both IoT and cybersecurity businesses.BB Stock Outpaces IndustryBB’s shares have gained 14% in the past six months, significantly outpacing the Internet Software industry’s growth of 9.3%. The broader Zacks Computer & Technology sector and the S&P 500 composite have registered declines of 1.4% and 0.3%, respectively.Price PerformanceImage Source: Zacks Investment ResearchBlackberry has underperformed its peers (within the cybersecurity space), such as CrowdStrike Holdings, Inc. CRWD. It has registered higher gains than Fortinet FTNT. Fortinet has gained 4.6%, while CrowdStrike is up 34.3% over the same time frame.BB Trades at a DiscountBB stock is trading at a discount, with a 12-month price/book multiple of 3.58X compared with the Internet Software industry’s 6.38X.  Image Source: Zacks Investment ResearchFortinet and CrowdStrike are trading at a 12-month price/book multiple of 39.28X and 34.64X, respectively, compared with the Security industry’s multiple of 24.46X.BB Investment ConsiderationsDespite near-term headwinds and geo-political uncertainties, BlackBerry’s strong execution on cost cuts, strategic divestitures, and continued QNX momentum support a stable outlook. The company’s impressive earnings surprise history and improving fundamentals make a compelling case.For now, holding BB stock remains the most prudent strategy, allowing investors to benefit from its growth prospects while navigating external risks. New investors could wait for a more favorable entry point.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Microsoft Corporation (MSFT): Free Stock Analysis Report Fortinet, Inc. (FTNT): Free Stock Analysis Report BlackBerry Limited (BB): Free Stock Analysis Report CrowdStrike (CRWD): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks