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BlackBerry chief executive John Chen uses a Passport smartphone following the official launch event in Toronto, on Sept. 24, 2014.Aaron Harris/Reuters

Less than a week after BlackBerry Ltd. shares jumped to their highest level in 16 months on optimism around CEO John Chen's plan to win back core customers, a skeptical analyst report has dragged the stock down again.

BlackBerry shares were down more than 5 per cent in morning trading Wednesday after Morgan Stanley analyst James Faucette cut the stock to an "underweight" rating and set a $7 (U.S.) price target on the stock. BlackBerry stock closed on Nasdaq down 5.3% at $10.19 in heavy trading. The stock closed last Thursday at $12.06, its highest close since late June, 2013.

Mr. Faucette's main quibble is that investors are evaluating the stock based on brand new revenues Mr. Chen has stated he can derive in the 2016 fiscal year, starting next March. Mr. Chen has forecast he can deliver $250-million in new software revenue next year and another $100-million by charging customers for new services available through its free instant messaging app, BlackBerry Messenger.

"We estimate this implies that BlackBerry will not only successfully retain roughly its entire existing enterprise subscriber base – plus more – it will also convince that subscriber base to increase [about] three times how much it is paying BlackBerry today," Mr. Faucette wrote. "We are skeptical that BlackBerry will be able to achieve that level of success, particularly with a new product platform, new pricing, new go-to market strategy, and with a still very damaged brand."

While the Morgan Stanley analyst is a long-term BlackBerry skeptic, his points underscore an uncomfortable reality for the Waterloo, Ont., company: while Mr. Chen has presented himself as a credible, open and pragmatic leader who has moved quickly to focus the company on a new strategy, BlackBerry's future success rides on his ability to steer the boat across uncharted waters.

Few instant messaging companies outside Asia have proven they can deliver big, sustainable revenues, and BBM is quickly becoming an also-ran in the space, far outpaced by much larger rivals WhatsApp, Snapchat and even cross-town Kik Interactive. BlackBerry has yet to show it can derive substantially more revenues from software in a range of new areas. And it's still too early to know whether its newly released Passport device or the upcoming Classic, a retro take on its Bold smartphone released six years ago, can generate enough sales to break even and justify staying in the handset business.

Meanwhile, the company faces the continued loss of high-margin revenues it generates from charging wireless carriers monthly fees for using its data network to ferry e-mail and Internet traffic to and from its handsets. BlackBerry earned $424-million in service fees in its last quarter, down more than $1-billion per quarter three years ago, and company warned those revenues are continuing to drop at a rate of more than 10 per cent from quarter to quarter.