Wells Fargo Revises BlackBerry's Q4 Earnings Lower, Suggests Shares Are Near A Bottom

Maynard Um of Wells Fargo on Thursday revised his fourth quarter estimates for BlackBerry Ltd BBRY following a meeting with the company's management team.

“In general, we believe management continues down the right path having refocused the company, renewed its portfolio and now focusing on rebuilding distribution,” Um wrote. Nevertheless, the analyst adds his beliefs that the bottom in revenue is at least one quarter away, a ramp in software revenue will be small for the time being and visibility to its product ramp still remains low.

Um lowered his fourth quarter revenue estimate to $721.1 million from a previous estimate of $783.8 million, which is below the consensus estimate of $848 million. At the same, the analyst is projecting the company to report a loss of $0.05 per share versus prior estimates of a $0.03 per share loss.

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Bottom line, Um clarifies that he isn't "negative" on the stock and maintains a view the company's infrastructure may give it an early advantage with scale and security through monetization beyond fiscal 2016. As such, the analyst believes that shares are near, but not at a bottom.

Shares are Market Perform rated with a valuation range of $9.50 to $10.50.