Goldman Sachs Downgrades BlackBerry Limited to "Sell"

• Goldman Sachs downgraded BlackBerry Limited to a "Sell" rating due to concerns over its future performance.
• BlackBerry's stock has underperformed, with a significant decline of 20.46% over the past month, highlighting challenges in keeping pace with the industry.
• The company's financial outlook is bleak, with an anticipated EPS of -$0.04 for the upcoming quarter, representing a decline of 166.67% from the previous year.

Goldman Sachs recently downgraded BlackBerry Limited (NYSE:BB), a company known for its cybersecurity software and services, to a "Sell" rating. This adjustment was announced on June 12, 2024, when BB's stock was trading at $2.77. Despite this downgrade, the recommendation to hold the stock remains. This move by Goldman Sachs reflects a cautious stance towards BlackBerry's future performance, as detailed in their publication on StreetInsider.

BlackBerry's stock experienced a minor increase, closing at $2.77, which is a 0.36% rise from the previous day. However, this slight uptick does not mask the broader challenges the company faces. Over the past month, BB's shares have declined by 20.46%, significantly underperforming compared to the Computer and Technology sector's loss of 3.6% and the S&P 500's gain of 3.11%. This underperformance highlights BlackBerry's struggle to keep pace with its industry peers and the broader market.

The company's financial outlook adds to the concerns, with an anticipated earnings per share (EPS) of -$0.04 for the upcoming quarter. This represents a significant decline of 166.67% from the same quarter last year. For the full year, projections suggest an EPS of -$0.03 and revenue totaling $615 million, indicating a substantial decrease in earnings by 160% and a 27.9% drop in revenue from the previous year. These figures underscore the financial hurdles BlackBerry is currently navigating, further justifying Goldman Sachs' sell rating.

BlackBerry is set to release its first-quarter fiscal year 2025 results on June 26, 2024. This announcement is awaited with a mix of concern and interest by investors, given the company's recent performance and financial projections. The results will be followed by a conference call, providing an opportunity for investors to gain insights into the company's strategy and outlook.

In addition to its financial challenges, BlackBerry has also highlighted the increasing financial and reputational impacts of software supply chain attacks on companies worldwide. A global survey conducted by the company revealed that over 75 percent of software supply chains faced cyberattacks within the past year. This research underscores the critical vulnerabilities within the software supply chain and the urgent need for robust security measures, an area where BlackBerry aims to provide solutions.