Does BlackBerry’s 97% Rally Signal a Fair Price After QNX Powers New Automotive Deals?

If you have been eyeing BlackBerry stock and wondering whether now is the time to buy, hold, or walk away, you are not alone. The stock has been on quite a ride over the past year, grabbing attention far beyond its legacy reputation. In fact, BlackBerry's share price nearly doubled in the past twelve months, rising 96.9%, even as it dipped 9.6% in just the last week. Over the past month, it gained a notable 16.9%, and so far this year, it is up 14.0%. These moves are drawing both seasoned followers and newcomers to reassess what is actually driving BlackBerry shares higher. Investors are debating whether the growth reflects change in the company's business prospects or simply shifting perceptions of risk.

Despite some volatility, BlackBerry has benefited from renewed optimism in sectors like cybersecurity and connected devices. Recent market chatter points to evolving demand for secure communications solutions, which could underpin long-term growth potential, even as the path may not be smooth. Still, when measuring how undervalued the company is by traditional metrics, BlackBerry scores a 2 out of 6 according to our latest value checks. This signals there is some, but not overwhelming, evidence the stock may be underpriced at today’s levels.

There is more than one way to value a company like BlackBerry, and the rest of this article will walk you through the big approaches investors use to judge if a stock looks cheap, fair, or expensive. Stay tuned until the end, where we will explore a method that may offer an even clearer answer for your investing strategy.

BlackBerry scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: BlackBerry Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model estimates what a company is worth today by forecasting its future cash flows and discounting those back to the present. This approach helps investors decide if a stock's current price reflects its true long-term potential.

For BlackBerry, the latest figures show current Free Cash Flow (FCF) at $17.30 Million. Analysts expect this to rise significantly over time, with estimates (and projections from Simply Wall St when analysts do not provide them) anticipating FCF could reach around $1.23 Billion by 2035. This trajectory represents a sharp increase, from $130.5 Million expected in 2027 to a projected $861.08 Million in 2032, and continuing higher into the next decade.

Based on these cash flow growth projections and the 2 Stage Free Cash Flow to Equity model, the DCF analysis calculates an intrinsic value of $36.40 per share. With BlackBerry’s current share price over 80% below this fair value, implying the stock is 82.7% undervalued, the DCF model suggests BlackBerry could be trading at a steep discount to its underlying business value.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for BlackBerry.

Our Discounted Cash Flow (DCF) analysis suggests BlackBerry is undervalued by 82.7%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: BlackBerry Price vs Earnings

For profitable companies, the Price-to-Earnings (PE) ratio remains one of the most popular ways to value a stock. This is because it directly links a company’s share price to its actual earnings, offering a straightforward look at how much investors are willing to pay for each dollar of profit. The higher the growth prospects and the lower the risk, the higher the “normal” or fair PE ratio investors might accept.

BlackBerry’s current PE ratio is an elevated 134.9x, which stands out against the Software industry average of 54.7x and a peer average of 82.1x. These high multiples usually reflect exceptional growth expectations or unique market circumstances. However, relying on industry or peer averages alone does not account for what truly makes BlackBerry distinct, such as its profit margins, growth prospects, or market risks.

That is where the Simply Wall St “Fair Ratio” comes in. This proprietary metric blends BlackBerry’s earnings growth outlook, profit margins, industry context, and market cap to arrive at a more custom fair multiple. In this case, the Fair Ratio is 40.5x. Unlike industry averages or peer comparisons, the Fair Ratio tailors the benchmark to BlackBerry’s own strengths and risks, leading to a more informed judgment.

Comparing BlackBerry’s actual PE ratio of 134.9x to the Fair Ratio of 40.5x, the stock looks considerably overvalued on this metric.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your BlackBerry Narrative

Earlier we mentioned that there is an even better way to understand valuation. Let’s introduce you to Narratives. A Narrative is a simple, yet powerful, tool that lets you express your view on a company by connecting its story to detailed financial forecasts and ultimately to your own fair value estimate. Narratives make it easy for anyone, regardless of investing experience, to share their perspective and see how changes in revenue, earnings, or margins could affect BlackBerry’s value.

Available on Simply Wall St’s Community page, Narratives are used by millions of investors to help make smarter buy or sell decisions by directly comparing their fair value to the current share price. The best part is that Narratives are updated automatically as new information emerges, such as earnings announcements or breaking news. This ensures your view always reflects the latest data.

For BlackBerry, you might see one Narrative forecasting future growth and a fair value of $40 per share, while another takes a more cautious view and sets fair value closer to $7. Narratives let you weigh these perspectives, making investment decisions more informed, personal, and dynamic.

Do you think there's more to the story for BlackBerry? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.

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