BlackBerry (BB) Stock Forecast & Price Target

BlackBerry is becoming more attractive because its pivot to software is increasingly translating into better fundamentals, with FY27 guidance now at $616-636MM revenue and $141-158MM adjusted EBITDA, while operating cash flow guidance was raised to $115MM and free cash flow in Q2 reached $27MM, the highest for that quarter in 11 years. Its core QNX business is the main growth engine, as Q2 QNX revenue rose 27% Y/Y to a record $80MM, royalties increased $10MM Y/Y, and the quarter delivered the largest design-win period in QNX history, including Coretura adding over $100MM to the royalty backlog and broader momentum from GEM and physical AI opportunities. Although Secure Communications guidance was cut to $260-270MM and reflects slower near-term growth amid government procurement uncertainty, BlackBerry still ended Q2 with $447MM in cash and investments and $250MM in net cash, giving it flexibility for buybacks or M&A while the company’s improving profitability and cash generation support a constructive long-term outlook.

BlackBerry is still burdened by a business mix that depends heavily on lumpy, non-recurring revenue in Licensing and episodic government wins in Secure Communications, while the latter remains the weakest growth engine with lower-than-expected revenue, contracting gross margin to 61%, and guidance cut by $10MM at the mid-point for FY27 amid geopolitical uncertainty. Although QNX is benefiting from strong design-win momentum, a $950MM backlog, and revenue growth of 26% Y/Y in Q2 to $80MM, the stock appears to be pricing in a durable physical AI and automotive monetization story before those wins have fully converted into sustained production royalties, leaving execution risk high if timing slips. The shares also screen expensive relative to history at 7.8x NTM EV/S versus a 5-year average of 4.2x, with valuation already implying substantial upside from QNX’s current run-rate despite BlackBerry’s still-modest consolidated scale, uneven segment profitability, and dependence on continued momentum in design wins and margin expansion.