Good Technology Will Help BlackBerry (BBRY) Gain Market Share, but L-T Handset, Software Issues Remain - Oppenheimer

Oppenheimer affirms its Perform rating on BlackBerry (Nasdaq: BBRY) following news that the tech giant was moving to acquire Good Technology in a $425 million cash deal.

Analyst Andrew Uerkwitz offered the following key points on BlackBerry following this morning's announcement:

• Deal Rationale: BBRY believes that Good not only brings an important customer base on iOS devices, but also complementary capabilities and technologies, including secure applications and containerization that protects end user privacy.
• Merging Platforms: in the longer term, BBRY plans to merge its own and Good Technology's products on one unified platform, but in the near term, customers are not forced to immediately migrate.
• Good Technology: according to our checks, Good Technology has seen significant growth from 2012 to 2014, at a similar pace to that of mobile enterprise software and services market (20-30% Y/Y). But recently, the growth seems to have slowed down with an annual revenue run-rate at about $200M.
• Bottom Line: we believe Good will contribute $40M in FY16, as part of the $500M target for software revenues. If we are correct, it's another indication of slower-than-expected BES12 adoption. We see the acquisition positive for share gain but continue to have longer-term growth/pricing concerns for software and deep concerns for handsets.

For an analyst ratings summary and ratings history on BlackBerry click here. For more ratings news on BlackBerry click here.

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