Deutsche Bank Isn't A Fan Of The Long BlackBerry Trade

In a report published Sunday, Deutsche Bank analyst Brian Modoff explained why he is not a fan of the long BlackBerry Ltd BBRY trade.

According to Modoff, a long BlackBerry thesis is mostly a "sentiment" call, argued mainly on setup for higher software revenues in the mix (BES 12 monetization) and early encouraging sales trends for the new Classic and Passport devices. However, the analyst noted that a key insight from his analysis suggests that the stock is mostly correlated to movement in the fundamental metrics.

Modoff said that decelerating topline growth (fiscal 2015 revenues down 51 percent year-over-year; fiscal 2014 revenue down 40 percent from the prior year) and software representing approximately 10 percent of fourth quarter revenues is indicative of a setup for a "muted" stock performance.

Related Link: BlackBerry Continues To Struggle And Credit Suisse Thinks It's Time To Break Up The Company

Bottom line, with operating costs mostly played, BlackBerry is a "show me" story as the next catalyst is topline growth.

Shares remain Hold rated with an unchanged $9 price target.

Shares traded recently at $9.07, down 4.1 percent.