Bailey Pemberton
4 min read
BlackBerry has delivered a powerful share price run in recent years, and with cash flows in focus investors are asking whether that move lines up with what the business is likely to generate. After a series of upbeat QNX headlines and a sharply higher market value, the question now is how the current price stacks up against the cash the company can produce over time.
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Over the past 3 years the stock has gained 164.0%, which puts real pressure on the numbers to show that this kind of re-rating is supported by the cash that can flow back to shareholders.
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The QNX royalty backlog moving past $1.2b, including the Alloy Kore agreement, may support expectations for a longer stream of software driven cash inflows rather than one off spikes.
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Prefer to judge BlackBerry on earnings? See why BlackBerry’s 65.0x P/E tells a different valuation story.
For investors, the debate is whether BlackBerry’s current share price is now fully explained by the cash flows implied by its Discounted Cash Flow (DCF) intrinsic value estimate or whether there is a gap between the two.
If you want to test the same cash flow question that hangs over BlackBerry against a wider field of opportunities, start with our screener of 2 high quality undervalued stocks.
Where Does BlackBerry Sit on Cash Flow?
The Discounted Cash Flow (DCF) model here focuses on the cash BlackBerry can return to shareholders over time. Latest twelve month free cash flow sits at about $85.8 million, and the projections used in the DCF point to growing cash generation rather than a shrinking stream.
Analysts feeding into this model expect higher free cash flow into the early 2030s, with forecasts rising into the low hundreds of millions of dollars a year in $ terms, which then support a tapering long run growth phase. Because these cash flows are discounted back and compared with the current CA$12.46 share price, the resulting DCF estimate leaves BlackBerry’s intrinsic value broadly in line with where the stock trades today. The QNX royalty backlog moving past $1.2b helps explain why the market is willing to price the stock close to what these projected cash flows imply. Find out what BlackBerry could be worth using our Discounted Cash Flow (DCF) estimate.
The BlackBerry Narrative: What Would Justify Today’s Price?
Simply Wall St Narratives pick up where the BlackBerry valuation puzzle leaves off and explain which paths for growth, profitability and earnings would need to occur for the share price to appear meaningfully higher or lower than it does today on the market. Each Narrative treats fair value as a hypothesis about BlackBerry’s business that you can monitor over time rather than a one off snapshot, and they are available on Simply Wall St’s Community page for you to explore in more detail.
