BlackBerry Limited BB has staged an impressive comeback in 2026 with shares having rallied 124.8% year to date (“YTD”), outperforming the Internet Software industry (down 11.4%) and the S&P 500 composite (up 9.5%). The rally is underpinned by structural growth drivers and a strong business model.
Price Performance
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Yet, despite this strong run, the stock remains well below the 52-week high of $13.59, closing its last day at $8.52. This raises a key question for investors: has the easy money already been made, or does BlackBerry still offer meaningful upside?
BB: Continued Execution Momentum
BlackBerry delivered a strong start to fiscal 2027 with first-quarter revenues marking a 26% year-over-year increase. Profitability was equally impressive, with adjusted EBITDA more than doubling to $36 million. BlackBerry also reported positive GAAP net income for the fifth consecutive quarter
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Management highlighted that both its core segments — QNX and Secure Communications — achieved “Rule of 40” performance, reflecting a combination of strong growth and profitability.
The company also generated positive free cash flow, even in a seasonally weaker quarter.
The balance sheet remains strong, with $423 million in cash and investments and continued repurchases reinforce capital allocation discipline.
BlackBerry repurchased 2.6 million shares during the quarter for approximately $10 million. Since its launch in May last year, the company has bought back 18 million shares totaling $17 million. Last month, BlackBerry renewed and expanded its share repurchase program, authorizing the buyback of approximately 27 million additional shares.
QNX: The Core Growth Engine
QNX remained the key catalyst, with revenues climbing 26% year over year to $72 million. The segment benefited from broad-based strength, particularly in development licenses, which hit their highest level in eight quarters. This metric serves as an early indicator of future royalty streams, reflecting customer investments in new software platforms that will take years to reach production.
Management emphasized that these tools are tied to new platforms, including its SDP 8 architecture, which positions the company for multi-year revenue visibility.
Management highlighted partnerships with major chipmakers such as NVIDIA and Qualcomm, underscoring QNX’s role as a foundational software layer in next-generation intelligent systems.
Beyond automotive, General Embedded Markets and Physical AI are emerging as a fast-growing opportunity, expanding QNX’s reach into industrial automation, robotics and medical devices.
Additionally, the company continues to advance Alloy Kore, a platform expected to significantly increase software content per vehicle, boost average selling price by multiples and drive backlog. While still early, management remains positive about securing a design win within the current fiscal year.
Secure Comms: Headwind to Growth Contributor
Secure Communications also delivered a standout quarter, with revenues increasing 24% year over year to $74 million. The segment is witnessing improved performance anchored by government demand, recurring revenues and customer retention. Rising demand for digital sovereignty and cybersecurity modernization by governments across the globe is creating a powerful tailwind.
Underlying metrics such as annual recurring revenue (“ARR”) and customer retention indicate a steady base. ARR grew 5% to $220 million, with a healthy dollar-based net retention rate, or DBNRR came in at 92%.
BB’s Strong Outlook
Encouraged by the strong start, BlackBerry now expects total revenues between $594 million and $621 million compared with $584-$611 million projected earlier. Adjusted EBITDA is projected between $119 million and $139 million.
QNX revenues are expected in the range of $295-$312 million and adjusted EBITDA at $74-$86 million. It expects Secure Communications revenues of $270-$280 million and adjusted EBITDA of $57-$65 million. Licensing & Other revenues are expected to be roughly $29 million.
The strong start to fiscal 2027 and subsequent outlook revision reinforces that BlackBerry’s turnaround strategy is gaining traction.
However, the path is not without challenges. Secure Communications remains exposed to deal-timing variability and this could impact performance. In addition, some of BlackBerry’s most exciting opportunities, such as physical AI, robotics and the Alloy Kore platform, remain in the early stages, introducing execution risk. Heavy reliance on the automotive industry is a concern. The QNX platform remains heavily exposed to vehicle production cycles and OEM spending, which, in turn, are highly dependent on macro conditions. BlackBerry faces increasing competitive pressures in both QNX and cybersecurity businesses.
Within QNX, it faces Wind River (VxWorks) and Alphabet’s GOOGL Android Automotive OS. The cybersecurity business is pitted against CrowdStrike CRWD, Palo Alto Networks PANW and a host of other cybersecurity companies.
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Given all this, the estimates for the current fiscal year have been revised downward over the past 60 days.
What to Make of BB’s Premium Valuation?
After a sharp rally, valuation becomes a key consideration.
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In terms of the forward 12-month price/earnings ratio, BB is trading at 43.83X, way higher than the Internet-Software sector’s multiple of 27.32X. The premium appears somewhat justified given the company’s improving fundamentals and long-term growth prospects.
In comparison, GOOGL trades at a forward 12-month P/E multiple of 21.86, while CRWD and PANW are trading at multiples of 144.45X and 91.99X, respectively.
Shares of GOOGL, CRWD and PANW have gained 19.3%, 72.8% and 88.4%, respectively, year to date.
Investment View: Here’s Why BB Is Still a Buy
BB currently carries a Zacks Rank #2 (Buy).
Strong QNX momentum, emerging opportunities in the GEM space and a resurgent Secure Communications segment all point to meaningful long-term potential. With significant gains already, the buying opportunity may no longer be as attractive as earlier, but for investors with a long-term horizon, BlackBerry’s transformation suggests that the rally may not be over just yet.
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