Although BlackBerry appears to have succeeded at getting out of the smartphone handsets that hung like an albatross about its neck, the Canadian outfit has a long way to go before it can convince the world its software business is a goer.
The company, which will report fourth-quarter and full-year results on Friday, says it has no major gaps in its software portfolio, thanks to the integration of a string of recent acquisitions.
However, it admits that more work is needed to get those offerings into the healthcare and automotive industries and other sectors that it hopes will power future growth.
While analysts see Blackberry as something different from what it was ten years ago, it has not really convinced businesses that it has products they might want.
Chief Executive Officer John Chen would need a late bump in sales to hit the 30 percent growth in software revenue BlackBerry targeted for its recently completed fiscal year.
BlackBerry’s enterprise-value-to-forward-revenue ratio is 3.14 lower than the roughly 4.5 ratio which Oracle and Microsoft have. In fact, Blackberry is expected to barely break even in the fourth quarter and likely notch revenue of less than $1.4 billion. In the good old days, Blackberry was taking more than $5.5 billion a quarter.
The redesigned company has gone from selling its own phones with the servers and software that manage them for businesses and governments to securing an array of rival devices and the information that flows to and from them.
The company’s 2015 purchases of Good Technology and WatchDox helped it secure a leading position in the enterprise mobility market, and its QNX industrial operating system is key to its self-driving vehicle ambitions. However, there is tough competition in these and other areas of interest.
Chen, who took over the helm of BlackBerry in late 2013, said in December the company would take another four or five quarters to halt the steady decline in its overall revenue, with software sales growth projected to slow to around 15 percent in the fiscal year that began in March.