RIMM was hit with two negative analyst calls yesterday and the stock traded off (down 8.6% on a day when the NASD was up 3.4%) as if it still carried a 40x multiple. But it doesn’t. At about $53 per share, RIMM is trading at 16x even the most conservative analyst estimates for FY2010 ($3.33 per share). This, despite the fact that RIMM is still generally expected to deliver 40%+ revenue growth and 30%+ earnings growth next year. And, let’s not forget that RIMM has more than $1.5 billion of cash on its balance sheet and virtually no debt.
Sure, RIMM is experiencing some delays in getting the Bold (AT&T) to market and is supposedly seeing less-then-stellar uptake on its new flip phone (T-Mobile) based on VERY early indications. But, initial reviews of BlackBerry’s Storm (Verizon) touch-screen device have been surprisingly strong - even giving its touch-screen an edge over the iPhone’s.
Bottom line: RIMM just may be one of the most undervalued names out there right now.
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