Research In Motion
Last night's second-quarter report proved as much, with revenue rising 31% year-over-year to $4.6 billion, while 76% higher earnings amounted to $1.46 per share. These figures surprised Wall Street, and RIM's stock is trading higher today as a result. That's despite the fact that RIM's 4.5 million net new subscriber accounts fell far below management guidance, as a large number of the quarter's BlackBerry sales simply upgraded the phone attached to an existing account rather than going into a whole new belt clip.
So that's the good news. On the downside, RIM's results don't look all that impressive when held up to the light of Apple
RIM's management is talking itself warm over the BlackBerry Torch launch, despite reports of relatively weak launch sales of a phone that doesn't impress anyone in the age of Motorola
If RIM can keep it that way without adding a whole lot of new addicts, maybe that's good enough to support the share price. The former high-flying market darling has become a downright value stock:
Company |
P/E (trailing earnings) |
Peak P/E, 2008 to Today |
---|---|---|
RIM |
8.7 |
67.8 |
Apple |
20.8 |
49.6 |
Motorola |
50.9 |
121.1 |
Nokia |
29.7 |
66.9 |
Source: Capital IQ, a division of Standard & Poor's.
In fact, the current growth would need to hit an absolute brick wall for the P/E ratio to make any sense. Even if you think RIM is toast in the long term, you have to see a ridiculous value in the stock at the moment.
I've never been a Research In Motion fan, nor a BlackBerry addict, but I'm moved to rate the stock "outperform" in our CAPS system, at least for the next year or so. There should be a nice rebound in there somewhere, but all bets are off after that. Tag along if you like.