BlackBerry (BB, Financial) experienced a significant stock drop, plunging around 20%. This occurred despite the company's fourth-quarter revenue and adjusted earnings surpassing expectations. The revenue reached $586 million, beating the forecast of $572 million, while the adjusted EPS was $0.03, compared to an anticipated loss of $0.02. However, the company's guidance for its fiscal 2025 cybersecurity business growth was a median of only 6.8%, falling short of the market's expectation of 12% growth.
Analysts have raised concerns about BlackBerry's market position, particularly in the connected car systems (QNX) sector, where competitors like Tesla are gaining ground. The company's strategic shift towards becoming an enterprise security service provider is facing significant challenges.
In response to these developments, Morgan Stanley has lowered BlackBerry's target price from $4.50 to $3.20, maintaining an "underweight" rating on the stock.
