Tech Analyst Warns That BlackBerry Has 'Upper Boundary' of $10

BlackBerry Ltd BBRY is approaching its "upper boundary," according to an analyst at Imperial Capital in a note that previews next week's earnings report. The analyst has a price target of $10 on the stock based on a sum-of-the-parts valuation and the fact that $1.25 billion in convertible debt can be exchanged for shares at $10.

In a preview of next week's earnings, Imperial Capital mentioned that it sees BlackBerry's revenue at $753 million with a quarterly loss of $0.05 per share. The firm also says that risks to its outlook are on the downside with potential for declining service revenue and potential risks to the software outlook.

Imperial questions BlackBerry management's ability to double software revenue to $500 million in FY16. Based on its industry conversations, Imperial says that BlackBerry has not won any "major customers" – even saying that one competitor said it competed against Blackberry in "few (if any)" RFPs.

BlackBerry closed Thursday at $9.70, indicating just 3 percent potential upside to the stock based on this analysis.