If a BlackBerry bush falls in the forest but no one is there to hear it, does it make a sound? I guess that depends on cell-tower coverage and installed ringtones. Either way, we'll get a third-quarter update from BlackBerry maker Research In Motion (NASDAQ:RIMM) on Thursday night. Fellow Fool Alex Dumortier was left skeptical by the second-quarter report, and Dave Mock can find a few reasons to either buy or sell this stock. Let's find out why.
What Fools say:
Here's how Research In Motion's Motley Fool CAPS rating stacks up against some of its peers and competitors:
|
Market Cap (billions) |
Trailing P/E Ratio | ||
|---|---|---|---|
|
Google (NASDAQ:GOOG) |
$102.4 |
19.6 |
*** |
|
Apple (NASDAQ:AAPL) |
$84.8 |
17.8 |
**** |
|
Nokia (NYSE:NOK) |
$62.0 |
8.6 |
**** |
|
Research In Motion |
$22.6 |
12.8 |
** |
|
Motorola (NYSE:MOT) |
$10.0 |
N/A |
** |
Data taken from Motley Fool CAPS and Capital IQ, a division of Standard & Poor's, on Dec. 17.
"People aren't rushing out to buy a new $200 phone when their old phone is working just fine," says CAPS player Foliobuilder in support of a thumbs-down rating on RIM. "Meanwhile Apple is eating RIMM's lunch because they have the consumer side and are now encroaching on the enterprise side."
On the other hand, all-star CAPS player DemonDoug poses the rhetorical question, "What kind of company is most likely to survive a severe downturn, even a depression, and possible U$dollar deflation (and therefore beat the S&P 500)?" The answer: "One with no debt," like Research In Motion.
What management does:
The BlackBerry has certainly held its own against an onslaught of iPhones, Androids, and assorted lesser lights. What other multibillion-dollar seller of high-tech goods can still double both sales and earnings year over year these days?
|
6/07 |
9/07 |
12/07 |
3/08 |
5/08 |
8/08 | |
|---|---|---|---|---|---|---|
|
Gross |
53.6% |
52.5% |
51.6% |
51.3% |
51% |
50.9% |
|
Operating |
26.5% |
27.1% |
27.8% |
28.8% |
29.2% |
28.7% |
|
Net |
20.7% |
20.7% |
21.1% |
21.5% |
21.7% |
21% |
|
FCF/Revenue |
16.7% |
13% |
16.3% |
20.4% |
12.2% |
13.5% |
|
Y-O-Y Growth |
6/07 |
9/07 |
12/07 |
3/08 |
5/08 |
8/08 |
|---|---|---|---|---|---|---|
|
Revenue |
57.6% |
76.3% |
89.6% |
97.9% |
104.5% |
98.5% |
|
Earnings |
94.9% |
116.5% |
133.1% |
104.9% |
113.9% |
101.6% |
All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.
One Fool says:
Research In Motion's unique market position is based on a huge and very adoring fan base. Sure, iPhones can run business applications. Of course you can connect to your company's Microsoft (NASDAQ:MSFT) Exchange servers with a humble Nokia or Motorola smartphone. But then you don't have a BlackBerry, dude, so it can't be real business. Customer perception is a powerful force, indeed. And customers perceive BlackBerry to be the business smartphone.
I'm curious to see how the experiment from Verizon Wireless, a joint venture between Vodafone and Verizon (NYSE:VZ), using BlackBerry Storm in consumer-oriented RIM phones is working out. I think chances of a massive success are about equal to the risk of a headlong pratfall, and the outcome here will set the tone for the next few years of growth -- or lack thereof. Tune in, then turn on or back out.
