Merrill Lynch maintained an Outperform rating on BlackBerry Ltd ( NASDAQ:BBRY ) with price objective of $six. The sell side firm reviewed BlackBerry’s announcement of acquiring Good Technology, and believes that the acquisition will prove to be a excellent addition to the company’s portfolio. The IT safety segment commands very high valuations, count on upside possible to exist after Good prices their IPO. Standing in Good’s way of IPO good results will be issues with profitability, but investors must count on an additional booming IPO likes Box’s (NYSE: BOX ) in Q1. The mobile safety market is nevertheless hugely fragmented, with heavy competitors from huge IT computer software and safety organizations like IBM (NYSE: IBM ) and VMware (NYSE: VMW ). In light of competitors, Good has been in a position to penetrate the Fortune 100 market by delivering comprehensive, easy-to-use options.
Excellent boasts a diversified base of intellectual property, customizable products, and robust consumer retention – all excellent indicators for investors hunting at high-growth firms. One particular way to look at this historic knowledge is Good has performed quite well with early adopters, as the mass of market starts to appear for solutions, Great will be nicely positioned for success. In fiscal 2014, Very good posted sales of US$211 million and a net loss of US$95.four million, according to filings.
Great has nearly doubled revenues from 2012 to 2014, growing from $117 million in annual sales to $212 million. For organizations with recurring revenue streams, these fees tend to diminish over time, as base revenue retention is much less costly than new client acquisition. Shares of BlackBerry jumped as much as 5 per cent in early morning trading in Toronto, but fell later in the day 1.7 per cent to $9.69 at 2:45 pm ET. The stock has fallen 23.9 per cent so far in 2015.
BlackBerry, which has focused on securing devices, would gain far more than 160 issued patents if it succeeds in acquiring Good and it would also make inroads into places in which its performance has been lagging. Very good, which serves much more than 6,200 organizations in 189 nations with its mobile safety solutions, filed IPO plans in May possibly 2014 but postponed the offering amid worsening market place conditions.
The turnaround specialist has promised to more than double sales of BlackBerry’s software program division in fiscal 2016 to US$500 million and the acquisition of Good, like the other individuals, propels him closer to what has been observed by some analysts as a lofty goal. In August 2014, Great earned a Secure Technical Implementation Guide from the Defense Data Systems Agency to operate on iOS7 , its sixth STIG considering that 2006.