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BlackBerry (BB) Teams Up With Magna to Advance ADAS Solutions

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BlackBerry BB is teaming up with Magna International MGA to develop next-generation Advanced Driver Assistance Systems (ADAS) solutions for automakers.

Canada-based Magna designs, develops and manufactures automotive systems, assemblies, modules and components apart from engineering and assembling complete vehicles, primarily for sale to original equipment manufacturers (OEMs) of cars and light trucks.

Magna will leverage BlackBerry’s QNX software, including the QNX Software Development Platform, QNX Platform for ADAS, QNX OS for Safety and professional engineering services for solution validation, system-level integration and performance optimization.

BlackBerry QNX is a leading name in providing safety-certified embedded software for automotive and is embedded in more than 195 million vehicles. Apart from automotive, BlackBerry QNX software is also deployed in embedded systems across various industries like aerospace and defense, industrial controls, heavy machinery, medical, rail and robotics, among others.

BlackBerry Limited Price and Consensus

 

BlackBerry Limited Price and Consensus
BlackBerry Limited Price and Consensus

BlackBerry Limited price-consensus-chart | BlackBerry Limited Quote

 

The partnership with BlackBerry is also expected to aid Magna in speeding up the time to market for its new products.

Increasing Opportunities in the Auto Domain Bode Well

Per a Fortune Business Insights report, the global ADAS market is expected to reach $58.59 billion at a  CAGR of 11.4% from 2021 to 2028. The market is being driven by the addition of the latest features to vehicles by global automakers.

BlackBerry intends to drive healthy revenue growth and increase market share in the auto industry vertical. The company is investing heavily in product development and go-to-market strategy. Within the auto sector, increasing consolidation of digital cockpits augurs well for BlackBerry.

In December 2021, BlackBerry teamed up with a leading China-based connected car company PATEO to incorporate its BlackBerry IVY platform into the latter’s intelligent Digital Cockpit solution. The incorporation will help the companies in delivering Service-Oriented Architecture solutions.

BlackBerry IVY is a scalable and cloud-connected software platform designed mainly for developers and automakers to share vehicle data securely. BlackBerry expects the Serviceable Addressable Market or SAM for IVY to be nearly $800 million in fiscal 2025.

Yet, the company remains wary as the auto industry faces headwinds related to the global chip shortage due to supply chain disruptions and the Ukraine crisis.

Recently, the company outlined its long-term financial targets, which include achieving revenues of $1.213 billion by fiscal 2027 at a five-year CAGR of 13%. The company had reported revenues of $718 million in fiscal 2022 ended Feb 28, down 19.6% year over year.

For its IoT (excluding IVY) and Cybersecurity segment, BlackBerry expects to achieve $443 million and $770 million in revenues by fiscal 2027 at a five five-year CAGR of 20% and 10%, respectively.

At present, BlackBerry carries a Zacks Rank #3 (Hold). Shares of BB have lost 29.5% of their value against the industry’s decline of 6.9% in the past year.

Key Picks

A few better-ranked stocks from the broader technology sector worth consideration are InterDigital IDCC and Flex FLEX. InterDigital and Flex sport 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 Flex’s fiscal 2023 earnings is pegged at $2.16 per share, up 6.9% in the past 60 days. The long-term earnings growth rate is pegged at 14.9%.

Flex’s earnings beat the Zacks Consensus Estimate all last four quarters, with the average being 21.1%. Shares of FLEX have declined 10.6% in the past year.

The Zacks Consensus Estimate for InterDigital 2022 earnings is pegged at $3.28 per share, up 5.1% in the past 60 days. IDCC’s long-term earnings growth rate is pegged at 15%.

InterDigital’s earnings beat the Zacks Consensus Estimate in all the preceding four quarters, with the average being 141.1%. Shares of IDCC have lost 15.2% of their value in the past year.


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Magna International Inc. (MGA) : Free Stock Analysis Report
 
Flex Ltd. (FLEX) : Free Stock Analysis Report
 
InterDigital, Inc. (IDCC) : Free Stock Analysis Report
 
BlackBerry Limited (BB) : Free Stock Analysis Report
 
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