BlackBerry (BB 0.68%) has struggled to turn its operations around over the past 15 years. It's no longer a top cellphone maker. And its new identity, focusing on cybersecurity and providing enterprise solutions, hasn't paid off. The company seems to always be in a state of transition.

There are three key reasons investors should think twice about buying this struggling stock.

1. Revenue has been going in the wrong direction

As a former investor in BlackBerry stock, the one thing I grew tired of was the company's declining sales. Despite announcements of new deals and all sorts of "wins," the results have consistently been going in the opposite direction. Revenue totaling $151 million was down 18% year over year last quarter (for the period ended Feb. 28) and that's really just a continuation of an ongoing trend for the business:

BB Revenue (Quarterly YoY Growth) Chart

BB Revenue (Quarterly YoY Growth) data by YCharts

When the company's five-year average is a negative growth rate of 6%, that's a big red flag that investors shouldn't ignore. On the company's most recent earnings press release, CEO John Chen mentioned multiple "design wins" and said that some "large government deals" shifted to later quarters. But despite the company's efforts to paint the business in a positive light, the results don't lie: BlackBerry is and has been a struggling business for years.

2. Brand power doesn't appear to be strong anymore

When BlackBerry made cellphones, the BlackBerry brand had a reputation for safety and security. But that reputation doesn't seem to have carried over to its new ventures into cybersecurity and offering enterprise solutions, as evidenced by its struggling sales numbers.

A key metric the company tracks is annual recurring revenue. Last quarter, it totaled $298 million, which was down 14% from a year ago. Customers are also spending less. Its dollar-based net retention rate for the period was just 81% versus 91% a year ago, with the company noting customer churn in its BlackBerry Spark platform, which is part of the cybersecurity business that helps secure endpoint communications.

Cybersecurity isn't something companies can afford to forgo these days in an increasingly online and interconnected world. And so if BlackBerry is struggling to keep customers, that's another big red flag and maybe a sign that the business's brand simply doesn't have the power it had when it comes to security anymore.

3. Blackberry's cost structure is poor

Another problem with BlackBerry's business is that the tech company is spending a lot of money (with respect to revenue) on selling, marketing, and administration costs, as well as research and development. And those expenditures haven't been paying off. More than 83% of revenue goes to those two areas alone, and that can make it nearly impossible for the company to turn a profit.

Data source: Company filings. Chart by author.

This past quarter, the company incurred impairment charges totaling $476 million. But even without those unexpected expenses, BlackBerry still would have been in the red as its operating loss was $499 million.

Investors should avoid BlackBerry stock

It's tempting to think that at its low $2.6 billion valuation, BlackBerry is a low-risk stock and the business is in the midst of a turnaround. But at some point, the business needs to show positive results rather than just talk about the deals it's making. There are simply too many negatives with the business, and investors are better off buying stock in a company that's actually growing.