BlackBerry Earnings: We Retain Our Long-Term Thesis and Valuation After Positive Results

We retain our fair value estimate for no-moat Blackberry at $4.40 per share as we maintain our long-term thesis after positive fiscal first-quarter results. Despite revenue coming in modestly above our model, weaker cybersecurity sales continue to weigh on overall top-line growth, and BlackBerry kept its full-fiscal-year guidance. We continue to like the growth profile of the Internet of Things business, which benefits from rising automotive software content and represents a strong competitive position for BlackBerry. In sum, we believe our short-term and long-term expectations for BlackBerry are intact. Shares rose about 8% after hours, responding positively to results beating guidance. Although shares continue to screen as undervalued, we would point investors to moatier software names under our coverage.