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BlackBerry (TSX:BB) Stock Rebounds On QNX Strength While Valuation Debate Persists

Simply Wall St · 1d ago

Traders punished BlackBerry earlier this quarter, with the stock still down about 28% over 90 days. Yet the latest earnings land more like a confidence check than a collapse. A Q2 profit of US$33.9 million on revenue of US$163.3 million, backed by a trailing P/E near 59.7x, raises a blunt question for sentiment: Is this still a comeback story that investors doubt, or a priced-for-perfection software stock that just delivered enough to keep the debate alive?

Love the bounce back to profit at BlackBerry but worried a P/E near 60x still prices in too much hope? Check out our curated list of 9 high quality undiscovered gems

Q2 2027 Earnings Summary

  • Revenue (Q2 2027 vs. Q2 2026): US$163.3 million vs. US$129.6 million (higher top line year on year)
  • Net Income, excl. extra items (Q2 2027 vs. Q2 2026): US$33.9 million vs. US$13.3 million (strong year on year uplift in earnings)
  • Basic EPS (Q2 2027 vs. Q2 2026): US$0.06 vs. US$0.02243 (material increase in earnings per share)
  • Trailing Net Profit Margin (TTM, latest vs. prior year): 13.1% vs. 3.7% (margin described as significantly higher over 12 months)

Prefer clear visuals instead of wading through dense earnings reports and spreadsheets? See BlackBerry's full financial picture with a focus on valuation in our interactive company report for BlackBerry.

TSX:BB Trailing 12-Month Earnings & Revenue History as at Sep 2026
TSX:BB Trailing 12-Month Earnings & Revenue History as at Sep 2026

Evaluating BlackBerry’s QNX‑Led Bull Story

Bulls argue BlackBerry is becoming a high margin, recurring software platform tied to QNX, Alloy Kore and secure communications rather than a legacy licensing shop. Q2 gives that view some solid proof points. QNX hit a record US$80 million in quarterly revenue with 87% adjusted gross margin and strong EBITDA, which supports the higher quality mix claim. Management also pointed to the strongest quarter yet for design win dollars and a QNX royalty backlog near US$1b, so the idea of long duration, contracted demand is backed by hard numbers, not just pipeline talk.

The more ambitious part of the thesis is the move up the stack with Alloy Kore and into general embedded markets. Here, the Coretura win matters. It is framed as the largest design win in BlackBerry history, with materially higher software content per truck and an estimated royalty value above US$100 million over time.

Access the analyst estimates for BlackBerry to see where the consensus models for BlackBerry start to diverge, when the street expects the next real inflection point, and whether the surface calm at around CA$11.57 today hides a very different profit and cash flow curve over the next few years.

BlackBerry Bears Focus On Conversion And Concentration

Bearish investors argue that BlackBerry’s QNX story risks stalling if design wins fail to convert quickly into cash and if regulated customers slow decisions. The quarter shows strong QNX orders and the Coretura Alloy Kore deal, yet the near US$1b royalty backlog is still largely theoretical for equity holders until production ramps materialize. Concerns about customer concentration and long certification cycles stay in play because management is still leaning on multi year contracts in safety critical markets rather than a broader, faster moving client base.

Worries that investment could outpace revenue are only partly addressed. Adjusted EBITDA of US$47 million and US$29 million of operating cash flow suggest cost discipline today, but the push into physical AI and general embedded markets still carries long sales cycles. Bears also pointed to dependence on public sector budgets. The trimmed Secure Communications revenue outlook supports that caution.

After long sales cycles, public sector exposure and heavy QNX reliance, review our independent risk analysis for BlackBerry which shows 1 important warning sign to identify any deeper structural issues.

Take Control Of Your Next Move

If BlackBerry's mix of high QNX margins, a near US$1b royalty backlog and a sharp P/E leaves you watching for a better entry point, register for free with Simply Wall St and add it to a Watchlist to track price against fair value and fresh earnings data in one place. After you build a position, keep your decisions grounded in numbers instead of headlines by managing everything through the Portfolio Command Center, which highlights only the most important changes across your holdings. For longer term thinking, use the Community to see how other investors are interpreting the same charts, risks and catalysts. That combination helps you surface hidden opportunities and potential red flags earlier so you stay a step ahead of the market.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.