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BlackBerry (BB) Mulling IPO for IoT Business Post Spin Off
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BlackBerry (BB - Free Report) recently announced that it is mulling to float an initial public offering for its Internet of Things (IoT) business after separating IoT and Cybersecurity business units into two independent entities. The separation is anticipated to unlock value for all shareholders. Following the announcement, shares are up 3.1% in the pre-market trading on Oct 5, 2023.
BB is looking to file for IoT IPO in the first half of its next fiscal year.
Spinning off IoT business in to a separate entity will aid shareholders to assess performance and future potential of the business on a standalone basis. Moreover, it will also extend more flexibility to each business to follow its own growth strategy and capital allocation policy, noted management.
In May 2023, the company had announced that it was undertaking a strategic evaluation of its business to boost shareholders’ value. The company’s board has been working with Morgan Stanley and Perella Weinberg Partners to assess comprehensive range of key alternatives.
BlackBerry provides intelligent security software and services to enterprises and governments around the world. It offers devices and software platforms for managing security, mobility and communications among hardware, programs, mobile apps and IoT.
BB recently reported second-quarter fiscal 2024 (ended Aug 31) adjusted loss per share of 4 cents. In the prior-year quarter it incurred non-GAAP loss of 5 cents. The Zacks Consensus Estimate was pegged at a loss of 2 cents.
Quarterly total revenues were $132 million compared with $168 million a quarter ago. The top line came in line with the Zacks Consensus Estimate.
Revenues from the Cybersecurity business totaled $79 million, down 28.8% year over year. The downside was primarily caused due to elongated sale cycles, especially in the government sector. Revenues from IoT of $49 million dipped 3.9% year over year.
However, management expects a stronger second half performance for Cybersecurity business owing to solid pipeline of significant deals, mainly in the government vertical. As a result, the company has reiterated its revenue outlook for the Cybersecurity segment. Segmental revenues are estimated in the range of $425-$450 million for fiscal 2024.
For IoT business, revenues are now projected in the $225-$240 million band for fiscal 2024. BlackBerry expects delays in pre-production software development programs or production schedules at automakers to impact IoT revenues in the fiscal year.
BlackBerry currently has a Zacks Rank #3 (Hold). The stock has lost 11.4% in the past year against the sub-industry’s growth of 33.6%.
The Zacks Consensus Estimate for Asure Software’s 2023 EPS has increased 35% in the past 60 days to 54 cents.
Asure Software’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average surprise being 676.4%. Shares of ASUR have surged 68.6% in the past year.
The Zacks Consensus Estimate for Synopsys’ fiscal 2023 EPS has gained 2.5% in the past 60 days to $11.09. SNPS’ long-term earnings growth rate is 16.4%. Shares of SNPS have climbed 43.4% in the past year.
The Zacks Consensus Estimate for VMware’s fiscal 2024 EPS has improved 5.9% in the past 60 days to $7.23.
VMware’s earnings outpaced the Zacks Consensus Estimate in two of the last four quarters, while missing it in the remaining quarters. The average earnings surprise stands at 1.2%. Shares of VMW have jumped 48.2% in the past year.
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BlackBerry (BB) Mulling IPO for IoT Business Post Spin Off
BlackBerry (BB - Free Report) recently announced that it is mulling to float an initial public offering for its Internet of Things (IoT) business after separating IoT and Cybersecurity business units into two independent entities. The separation is anticipated to unlock value for all shareholders. Following the announcement, shares are up 3.1% in the pre-market trading on Oct 5, 2023.
BB is looking to file for IoT IPO in the first half of its next fiscal year.
Spinning off IoT business in to a separate entity will aid shareholders to assess performance and future potential of the business on a standalone basis. Moreover, it will also extend more flexibility to each business to follow its own growth strategy and capital allocation policy, noted management.
In May 2023, the company had announced that it was undertaking a strategic evaluation of its business to boost shareholders’ value. The company’s board has been working with Morgan Stanley and Perella Weinberg Partners to assess comprehensive range of key alternatives.
BlackBerry provides intelligent security software and services to enterprises and governments around the world. It offers devices and software platforms for managing security, mobility and communications among hardware, programs, mobile apps and IoT.
BlackBerry Limited Price and Consensus
BlackBerry Limited price-consensus-chart | BlackBerry Limited Quote
BB recently reported second-quarter fiscal 2024 (ended Aug 31) adjusted loss per share of 4 cents. In the prior-year quarter it incurred non-GAAP loss of 5 cents. The Zacks Consensus Estimate was pegged at a loss of 2 cents.
Quarterly total revenues were $132 million compared with $168 million a quarter ago. The top line came in line with the Zacks Consensus Estimate.
Revenues from the Cybersecurity business totaled $79 million, down 28.8% year over year. The downside was primarily caused due to elongated sale cycles, especially in the government sector. Revenues from IoT of $49 million dipped 3.9% year over year.
However, management expects a stronger second half performance for Cybersecurity business owing to solid pipeline of significant deals, mainly in the government vertical. As a result, the company has reiterated its revenue outlook for the Cybersecurity segment. Segmental revenues are estimated in the range of $425-$450 million for fiscal 2024.
For IoT business, revenues are now projected in the $225-$240 million band for fiscal 2024. BlackBerry expects delays in pre-production software development programs or production schedules at automakers to impact IoT revenues in the fiscal year.
BlackBerry currently has a Zacks Rank #3 (Hold). The stock has lost 11.4% in the past year against the sub-industry’s growth of 33.6%.
Stocks to Consider
Some better-ranked stocks in the broader technology space are Asure Software (ASUR - Free Report) , Synopsys (SNPS - Free Report) and VMware . Each stock is sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Asure Software’s 2023 EPS has increased 35% in the past 60 days to 54 cents.
Asure Software’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average surprise being 676.4%. Shares of ASUR have surged 68.6% in the past year.
The Zacks Consensus Estimate for Synopsys’ fiscal 2023 EPS has gained 2.5% in the past 60 days to $11.09. SNPS’ long-term earnings growth rate is 16.4%. Shares of SNPS have climbed 43.4% in the past year.
The Zacks Consensus Estimate for VMware’s fiscal 2024 EPS has improved 5.9% in the past 60 days to $7.23.
VMware’s earnings outpaced the Zacks Consensus Estimate in two of the last four quarters, while missing it in the remaining quarters. The average earnings surprise stands at 1.2%. Shares of VMW have jumped 48.2% in the past year.