It seems like only yesterday that former enterprise smartphone king BlackBerry was left for dead, plagued by security problems and a marketplace that decisively preferred Apple iPhones and Android devices.
Apparently there's life in the patient after all. The company's stock has jumped 34 percent since the beginning of June, and both fundamental and technical analysts say there's reason to believe it has higher to go in the relative near term.
Part of this is due to CEO John Chen's skillful management of the company's costs and inventory since taking over the helm, said Colin Gillis, analyst at BGC Partners. Old inventory has been dispatched with, and at current spending levels the company can go on for a while, he said. Investors were also encouraged by the company's recent earnings report, a smaller-than-expected loss.
If costs can be kept under control, and the company's new phone—called the Passport—and operating systems are positively received in the fall, the company has a shot at becoming a viable niche player in smartphones, Gillis said.
Technical analysis also tells a positive story, at least for the immediate future, said Abigail Doolittle, founder of Peak Theories Research, with the stock likely hitting $14 sometime before the end of 2014.
If momentum pushes the stock to about $10.90, then the stock could make a "monster" move in a fairly short period of time, she said.
Some of this is due to the "trapped investor" syndrome—people who've already lost so much money on the stock that they hang on in lieu of cementing their losses, Doolittle said. It's also possible that investors see the company as a likely takeover target.
"People seem to love this stock," she said. "They will make excuses for this name."
Doolittle has predicted a move upward for BlackBerry for some time, despite the fact that in her view technical momentum does not seem to match the company's fundamentals. (Doolittle nevertheless believes that the entire stock market is overvalued, perhaps severely.)
Even with BlackBerry's good news, the company is by no means in the clear. BGC's Gillis has a buy rating on the company, and a price target of $11. He currently values the company at $5.7 billion.
Analyst Stuart Jeffrey at Nomura agrees that the immediate road ahead might be rough. "Management is targeting profitability sometime in FY16, but we think it hinges on the success of BES 12 [the next iteration of BlackBerry's enterprise software—scheduled for launch in late 2014] and future enterprise devices to stem the decline in services and hardware revenues. We forecast losses of $303 million in FY15," he said in a note recently.