Blackberry Q1 earnings preview: where next for Blackberry shares?

Blackberry shares have proven volatile this year as it gets caught up in the meme stock rally and will be in focus when it releases first-quarter results later this week. We explain what to expect and conduct some technical analysis to consider how Blackberry shares will react.

When will Blackberry release Q1 results?

Blackberry will release Q1 results after the markets close on Thursday June 24. This will cover the three months to the end of May.

What to expect from the Blackberry results

Blackberry, once known for its smartphones, is an entirely different business today. Now, it provides software and services to customers, including all of the G7 governments and almost all of the largest manufacturers and banks from around the world. Security sits at the heart of this, ensuring the growing number of connections and devices entering the market, from computers to self-driving cars, can be managed and protected effectively.

The pandemic meant its last financial year was tough, with revenue declining and losses ballooning. But total billings had returned to pre-pandemic levels by the end of the period as demand for its cybersecurity product SPARK and its operating system QNX improved as the year progressed. It also reported strong interest from automakers for its new intelligent vehicle data platform IVY that it launched with Amazon Web Services in December 2020.

QNX has become the system of choice for the electric vehicle market and has won contracts with 23 of the 25 largest manufacturers, and Blackberry has said it expects the product to return to a ‘normal revenue run-rate’ by the middle of the financial year.

Only on Monday, Blackberry said independent research firm Strategy Analytics had estimated that QNX software was now embedded in 195 million vehicles, up from 175 million a year ago, and revealed that QNX’s royalty backlog rose 9% to $490 million at the end of the first quarter from $450 million the year before.

Although progress has been made, analysts are expecting Blackberry’s first-quarter revenue to fall to $171.25 million from $214 million the year before, and for it to turn to a non-GAAP loss per share of $0.05 from earnings of $0.02 the year before. The GAAP loss per share is expected to widen to $1.97 from $1.14.

Blackberry intends to provide its outlook for the remainder of the year when it publishes its quarterly results this week, and investors will hope the operational progress being made will start to translate to an improvement in results. Analysts are currently expecting Blackberry to remain in the red this year but forecast losses will be a fraction of what was reported in the recently-ended one, and there is still a possibility that it could return to profitability sooner than expected.

Be wary that Blackberry has become a favourite among retail traders and investors, which lumps the company into the group of ‘meme stocks’ being discussed on Reddit and social media forums. Blackberry shares have gone through multiple periods of volatility and movements in meme stocks can be detached from the fundamentals.

When Blackberry shares almost quadrupled in January during the initial surge driven by retail traders it was because they rallied together to find the next short-squeeze . Notably, the short interest in Blackberry was higher at the end of May than at any other point since the start of 2021, according to data from MarketBeat.

Where next for the Blackberry share price?

After trending lower since early February, the Blackberry share price spiked high at the start of June, before finding resistance at $20. 

The Blackberry share price trades above its very gently upward sloping 200 day moving average, suggesting that there is mild uptrend in play. 

The MACD, however, formed a bearish crossover last week, which is often considered a sell signal. 

It would take a move below $12.30 to negate the near-term uptrend. A move below the 50 dma at 10.5 could see sellers gain traction.  

Meanwhile, bulls could be targeting $17.00 the June 8 high as the level to beat. 

How to trade Blackberry shares

You can trade Blackberry shares with City Index by following these four easy steps:

  1. Open a City Index account, or log-in if you’re already a customer.
  2. Search for ‘Blackberry’ in our award-winning platform
  3. Choose your position and size, and your stop and limit levels
  4. Place the trade 

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