What Hedge Fund Analysts Are Saying About BlackBerry

| About: BlackBerry Ltd. (BB)
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Things have not been good for BlackBerry (BBRY) over the past 5 years and the problems seem to be getting worse. This year alone shares are down over 50%. The smartphone and tablet developer is now trading at $6.17 per share, a pathetic fraction of the 2007 all time highs in the $230s. Among other challenges, the mobile phone industry has been dominated lately by Apple's iPhone (NASDAQ:AAPL) and devices operating on Google's (NASDAQ:GOOG) Android operating system. Recently plans from the company's largest shareholder, Prem Watsa, to take the company private have broken down. The stock price is floundering and expectations for the company are falling further and further. If BlackBerry can beat analyst expectations it may be the sign of a turnaround, if they can't the end could be near.

BlackBerry is expected to report FQ3 2014 earnings on Friday, December 20th. The information below is derived from data submitted to the Estimize platform by a set of Buy Side and Independent analyst contributors.image

The current Wall Street consensus expectation is for BBRY to report -46c EPS and $1.596B revenue while the current Estimize consensus from 18 Buy Side and Independent contributing analysts is -49c EPS and $1.568B revenue.

The Estimize consensus is more accurate than Wall Street up to 69.5% of the time because it represents unbiased market expectations. By tapping into a wider distribution of over 3,300 contributors including hedge fund and independent analysts as well as students and non professionals, Estimize is better able to capture the true market outlook.

The magnitude of the difference between the Wall Street and Estimize consensus numbers often identifies opportunities to take advantage of expectations that may not have been priced into the market. In this case, we're seeing a smaller differential between the Estimize and Wall Street numbers compared to previous quarters.image

Over the past four months the Wall Street consensus trend for EPS has dropped from -12c to -46c while Wall Street revenue expectations have also fallen from $3.011B to $1.596B. The Estimize EPS and revenue consensuses are relatively unchanged compared to Wall Street's. The Estimize EPS consensus went up from -50c to -49c and revenue edged up from $1.532B to $1.568B

Over the previous 6 quarters, BBRY has beaten the Wall Street consensus for EPS and revenue 2 times each. Over the same time period BBRY has beaten the Estimize EPS consensus 4 times and the revenue consensus twice.image

The distribution of estimates published by analysts on Estimize range from -36c to -70c EPS and $1.400B to $2.158B in revenues. This quarter we are seeing an average distribution of estimates compared to the previous 6 quarters. The size of the distribution of estimates relative to previous quarters often signals whether or not the market is confident that it has priced in the expected earnings already. A wider distribution signaling the potential for greater volatility post earnings, a smaller vice versa.


The analyst with the highest estimate confidence rating this quarter is jshoe who projects a -48c EPS and $1.491B in revenue. Estimize confidence ratings are calculated through algorithms developed by our deep quantitative research which looks at correlations between analyst track records and tendencies as they relate to future accuracy. jshoe, who has made 96 estimates in the information technology sector alone, is ranked 56th overall among over 3,300 contributing analysts. In this case the analyst with the highest rating is projecting an earnings report that is more bearish than both Wall Street and Estimize community.

While a surprise better than expected report could spark a turnaround for BlackBerry, the Estimize community is projecting them to miss Wall Street expectations on both EPS and revenue in Thursday's report. With not much more room left to fall, a disappointing earnings report could be another step closer to the end for BlackBerry.

Disclosure: none