How Should You Play BlackBerry Stock Before Q4 Earnings Release?

Core Viewpoint - BlackBerry Limited is set to report its fourth-quarter fiscal 2025 results on April 2, with earnings expectations and revenue projections indicating a challenging environment for the company [1][5]. Earnings Estimates - The Zacks Consensus Estimate for the upcoming quarter's earnings is 2 cents per share, unchanged over the past 60 days, compared to 3 cents per share in the same quarter last year [2][4]. - For fiscal 2025, the earnings estimate is 1 cent per share, down from 5 cents per share in the previous fiscal year, with revenues projected at $562 million, reflecting a 34.1% year-over-year decline [4][12]. Earnings Surprise History - BlackBerry has a strong earnings surprise history, having outperformed the Zacks Consensus Estimate in the last four quarters, with an average surprise of 131.25% [3][4]. Revenue Projections - The company expects fourth-quarter revenues to be between $126 million and $135 million, with the Secure Communications unit projected to generate $62 million to $66 million and the IoT business expected to bring in $60 million to $65 million [11][12]. - For fiscal 2025, revenues from continuing operations are anticipated to be between $517 million and $526 million, with the Secure Communications division expected to contribute $267 million to $271 million [12]. Operational Performance - Cost-cutting measures, including headcount reductions and facility closures, have positively impacted margin and bottom-line performance, with adjusted EBITDA reported at $23 million in the third quarter of fiscal 2025, up from $18 million year-over-year [13]. - The company anticipates adjusted EBITDA for the upcoming quarter to be between $10 million and $20 million, and for fiscal 2025, it is projected to be between $60 million and $70 million [14]. Market Position and Stock Performance - BlackBerry's stock has increased by 51.2% over the past six months, outperforming the Computer Software industry and broader market indices [16]. - The stock is currently trading at a discount, with a 12-month Price/book multiple of 3.26X compared to the industry average of 7.63X [19]. Strategic Focus - The company is focusing on high-margin areas such as IoT and Secure Communications, with expected benefits from the automotive segment and the relaunch of the QNX brand [7][10]. - The performance of the Secure Communications division is driven by strong demand for its endpoint management and critical events management solutions [9].