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

Core Viewpoint - BlackBerry Limited is expected to report its first-quarter fiscal 2026 results on June 24, with revenues projected between $107 million and $115 million, and an adjusted EBITDA of up to $7 million. The Zacks Consensus Estimate indicates breakeven earnings, unchanged over the past 60 days, following a loss of 3 cents per share in the prior-year quarter [1][8]. Financial Performance - BlackBerry has a strong earnings surprise history, having outperformed the Zacks Consensus Estimate in each of the last four quarters, with an average surprise of 93.75% [2][3]. - The company currently has an Earnings ESP of 0.00% and a Zacks Rank of 3 (Hold) [4]. Revenue Segments - The QNX segment is anticipated to drive performance, particularly due to demand in advanced driver assistance systems (ADAS) and digital cockpit solutions. The next-generation QNX operating system SDP 8.0 is gaining traction across various verticals [5][8]. - The Secure Communications division is expected to generate revenues between $50 million and $54 million, while Licensing & Other revenues are projected at approximately $6 million. QNX business revenues are expected to range from $51 million to $55 million [11]. Strategic Partnerships - BlackBerry has partnered with Microsoft to enhance its QNX Software Development Platform 8.0 within Microsoft Azure, aiming to support automakers in software development and innovation [6]. Market Conditions - The company anticipates a sequential decline in QNX revenues due to a volatile automotive market backdrop, with previous revenues at $65.8 million. Management has expressed uncertainty regarding the impact of recent tariff changes on business operations [12]. - The Secure Communications division faces challenges due to ongoing turmoil in core government markets, influenced by political changes in various regions [13]. Stock Performance - BlackBerry's shares have increased by 14% over the past six months, outperforming the Internet Software industry's growth of 9.3%, while the broader Computer & Technology sector and S&P 500 have seen declines [15]. - The stock is trading at a discount, with a 12-month price/book multiple of 3.58X compared to the Internet Software industry's 6.38X [20]. Investment Considerations - Despite near-term challenges and geopolitical uncertainties, BlackBerry's effective cost management, strategic divestitures, and ongoing QNX momentum support a stable outlook. The company's strong earnings surprise history and improving fundamentals present a compelling investment case [22].