BlackBerry Limited (TSE:BB) Just Reported And Analysts Have Been Cutting Their Estimates

As you might know, BlackBerry Limited (TSE:BB) last week released its latest yearly, and things did not turn out so great for shareholders. Revenues missed expectations somewhat, coming in at US$893m, but statutory earnings fell catastrophically short, with a loss of US$1.97 some 36% larger than what the analysts had predicted. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for BlackBerry

After the latest results, the consensus from BlackBerry's five analysts is for revenues of US$795.0m in 2022, which would reflect a definite 11% decline in sales compared to the last year of performance. Losses are predicted to fall substantially, shrinking 79% to US$0.41. Before this latest report, the consensus had been expecting revenues of US$1.04b and US$0.15 per share in losses. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue outlook while also expecting losses per share to increase.

The analysts lifted their price target 17% to US$5.88, implicitly signalling that lower earnings per share are not expected to have a longer-term impact on the stock's value. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on BlackBerry, with the most bullish analyst valuing it at US$8.76 and the most bearish at US$4.43 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would also point out that the forecast 11% annualised revenue decline to the end of 2022 is better than the historical trend, which saw revenues shrink 15% annually over the past five years Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 18% annually. So while a broad number of companies are forecast to grow, unfortunately BlackBerry is expected to see its sales affected worse than other companies in the industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for BlackBerry going out to 2023, and you can see them free on our platform here..

It is also worth noting that we have found 3 warning signs for BlackBerry that you need to take into consideration.

If you’re looking to trade BlackBerry, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.