Analysts Remain Cautious on BlackBerry Ltd Following Good Technology Deal
Wall Street analysts are weighing in on BlackBerry Ltd (NASDAQ:BBRY), after the tech giant announced the signing of a definitive agreement to acquire Good Technology for $425 million in cash. With the acquisition of Good, BlackBerry expands upon its global enterprise and government customers, as Good’s customer base includes more than 6,200 organizations, including more than half of the Fortune 100.
According to Oppenheimer checks, “Good Technology has seen significant growth from 2012 to 2014, at a similar pace to that of mobile enterprise software and services market. But recently, the growth seems to have slowed down with an annual revenue run-rate at about $200 million”.
Oppenheimer’s lead analyst Andrew Uerkwitz noted, “We believe Good will contribute $40M in FY16, as part of the $500M target for software revenues. If we are correct, it’s another indication of slower-than-expected BES12 adoption. We see the acquisition positive for share gain but continue to have longer-term growth/pricing concerns for software and deep concerns for handsets.” Uerkwitz rates BBRY stock a Perform, without providing a price target.
MKM Partners analyst Michael Genovese also came out with a cautious stance following the Good Technology deal, reiterating a Neutral rating and reducing the price target to $8.00 (from $8.50), which represents a potential upside of 7% from where the stock is currently trading.
Out of the 24 analysts polled by TipRanks, 3 rate BlackBerry stock a Buy, 16 rate the stock a Hold and 5 recommend to Sell. With a return potential of 26%, the stock’s consensus target price stands at $9.42.
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