Is This "Reddit Stock" Still a Buy?

BB was a participant in the Reddit-fueled trading mania

facebook twitter linkedin


Tech icon BlackBerry Limited (NYSE:BB) recently experienced an insane amount of volatility after it got caught up in the GameStop (GME) and r/WallStreetBets frenzy. At its 52-week high, BlackBerry stock reached $28.77. BlackBerry stock has since fallen back to the $10 level. So how should investors proceed? 

From a fundamental perspective, BlackBerry has very few redeeming qualities and is still far off from being worth its current valuation. The company’s forward price-earnings ratio of 54.35 doesn’t necessarily offer the best return, and its revenues have overall lacked consistency. In the past 12 months, BlackBerry’s sales have dropped $75 million from what was reported for fiscal 2020 and now stand at $965 million. In addition, the company’s net income has been on a constant decline, losing $1.235 billion since 2018. Its net losses now stand at $830 million.

However, BlackBerry does boast a decent balance sheet with $674 million in cash and cash equivalents, giving the company some room to potentially turn things around.

Plus, there's plenty of pessimism built into BB -- which is partially why it was blitzed by the Reddit army. All six of the analyst in coverage rate the stock a "hold" or "strong sell," while short interest increased by 58% in the most recent reporting period. 

One thing's for sure; options are an intriguing route, regardless of direction. The security's Schaeffer's Volatility Index (SVI) of 128% sits in the relatively low 19th percentile of its annual range. This means options traders are pricing in relatively low volatility expectations. 

 

Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

 
Schaeffer's Daily Bulletin Offer
 


 


 
Special Offers from Schaeffer's Trading Partners