We all desired a Blackberry at some point in our lives. It just goes to show how fleeting success in the tech industry can be, as Research in Motion Limited (USA) (NASDAQ:RIMM) (TSE:RIM) and Nokia (NOK) fight tooth and nail for market share as we start 2013. RIM has something up its sleeve, though, in the highly touted release of Blackberry 10 at the end of this month.
Blackberry 10: The RIMpire Strikes Back?
This is a make-or-break moment for the once tech titan of the smart phone segment. Only a diminishing loyal fan base and some top executives at RIM are very optimistic about the new device that, at first glance, actually looks more than ready to compete with the likes of the iPhone and the Android.
Blackberry 10 should bring some much needed revenue to RIM's coffers, even though the release is not going to upset the apple cart in terms of grabbing market share from the likes of Google and Apple. RIM may be much smaller with a market cap of 6.15B, but its hope is that Blackberry 10 will give the ailing Waterloo, ON based firm some much needed momentum.
What does fundamental analysis reveal about RIM?
The third quarter results have been disappointing industry wide, and RIM's dismal performance comes as no surprise. Even so, the stock has been on an uptrend over the last couple of months and is trading at around $11.55 a share right now. On the other hand, a negative EPS of -1.62 and a P/E ratio that is not reported doesn't help the cause of the one-time technology darling.
RIM lost a million subscribers in the 3rd quarter of 2012. While this is fairly diminutive in comparison to the overall base of 79 million, it signifies that the rapid growth in markets abroad is not sufficient to make up for the losses it has suffered in its more developed markets.
Investors are better off selling RIM
There are plenty of tech stocks out there and this one is best avoided. There are several weaknesses that fundamental analysis on RIM reveals. The feeble growth of its EPS is one and the poor profit margins is another. Furthermore, its net income keeps deteriorating, and the same can be said about its ROE.