Is RIM’s Future Looking Bleaker?

Research in Motion’s (NASDAQ:RIMM) newest operating system update is not due until January 30, yet some analysts are already cutting their ratings on the company’s stock. Despite the stock’s recent gains, Canaccord Genuity analyst Mike Walkley downgraded the cellphone manufacturer from a Hold to a Sell on Monday because he was not convinced that BlackBerry 10 sales could return RIM to profitability or popularity.

What was Walkley’s Analysis?

“While we believe BB10 is a dramatically improved user experience versus BB7 and RIM’s new hardware is more competitive with higher-end smartphones, our checks do not indicate the consumer pull, carrier push, or developer excitement necessary for BlackBerry 10 to reverse the challenging trends faced by RIM in order to return the company to sustained profitability,” wrote Walkley in a research note seen by Barron’s.

Catalysts are critical to discovering winning stocks. Check out our newest CHEAT SHEET stock picks now.

The “checks” that Walkley referred to were the global smartphone sales for the month of November. These figures showed that Apple’s (NASDAQ:AAPL) iPhone, as well as Samsung’s Galaxy S III, experienced “very strong sales” in the last four weeks.

Smartphone sales were an important metric for other analyses as well. Shaw Wu of Sterne Agee wrote in a recent note that there may not be enough market share for another major smartphone operating system other than Apple’s iOS and Google’s (NASDAQ:GOOG) Android. However, he did acknowledge that there was a slight possibility that carriers would want to counterbalance the industry’s two largest companies with another platform.

“As we have said in early November, we continue to pick up carrier interest in BlackBerry 10,” Wu wrote. “From our understanding, the rationale is simple. Carriers are growing increasingly leery with the growing dominance of iOS and Android and have been looking for a viable 3rd or potentially 4th platform with the hope that either BB10 and/or Windows 8 takes off.”

Wu maintains a Hold rating on RIM stock.

CHEAT SHEET Analysis: Will BlackBerry 10 Be a Positive Catalyst for RIM’s Stock?

One of the core components of our CHEAT SHEET Investing Framework focuses on catalysts that will move a company’ stock. While shares in Research in Motion have benefitted from the recent analyst coverage, the true catalyst for the company will be the success or failure of the BlackBerry 10 operating system. For the most part, analysts agree that the platform will be a great improvement over the previous model, but the main point of contention is whether the system can compete with iOS and Android.

Don’t Miss: Apple and Samsung: Still Leaving Competitors in the Dust.