Imperial Encouraged By BlackBerry

• BlackBerry Ltd BBRY shares have appreciated 14.8 percent over the past three months, although they are still trading closer to their 52 week low at $8.61 on December 18.
• Imperial Capital’s Michael Kim has maintained an In-Line rating on the company, with a price target of $7.
• Apart from the robust F3Q16 results, which beat expectations, Kim also expressed optimism regarding the progress on the company’s turnaround strategy.

Analyst Michael Kim mentioned that BlackBerry reported its F3Q16 adjusted revenue and EPS ahead of the consensus and the estimates.

“We are encouraged by the company’s continued progress on its turnaround strategy and shift toward software and services, which achieved better-than-expected growth,” Kim said, while stating the software and services revenue came in at $162 million, boosted by the 43 percent organic growth in software license revenue.

The company’s performance for the quarter also benefited from several intellectual property licensing agreements, along with a $53 million transaction.

According to the Imperial Capital report, management highlighted the “ongoing integration of its recent acquisitions, Good Technology and AtHoc, with the joint salesforce building pipeline,” while reaffirming the revenue guidance for Good Technology at $160 million for the first 12 months following the closure of the deal.

Service Access Fees and hardware revenue decreased during the quarter, with the former expected to continue to erode till year-end FY19.

BlackBerry guided to flat to a slight sequential increase in revenue n F4Q16, “driven by the hardware, software, and messaging businesses.”