I’m an owner of BlackBerry (NYSE:BB) stock, but I’m willing to admit that I was disappointed by elements of the company’s Sept. 22 second-quarter report. BB stock is down 7.5% this week.

Specifically, the year-over-year stagnation of the company’s cybersecurity revenue and its failure to close its long-awaited patent sale were difficult for me to stomach. Also negative, in some ways, was BlackBerry’s decision to hire its third de facto sales leader in a bit over two years.

Nonetheless, I believe that many people in the financial press and on Wall Street continue to underestimate the strength of BlackBerry’s financial results, the power of its upcoming growth engines, and the great extent to which BB stock is undervalued.

Disappointing Elements of Results

Despite all of the positive catalysts for cybersecurity over the last year, including multiple, high-profile cybersecurity attacks in the U.S. and overseas, along with the work-from-home trend, BlackBerry’s cybersecurity revenue was flat year-on-year last quarter, coming in at $120 million. On a positive note, however, the company’s cybersecurity revenue did climb 12% versus the previous quarter.

The lack of momentum on the cybersecurity front likely was the reason behind the company’s decision to hire its third sales leader since 2019. Bryan Palma, a former Cisco (NASDAQ:CSCO) GM, Customer Experience, was hired by BlackBerry as its COO and stayed with the company for less than a year, according to his LinkedIn profile. During his tenure, he managed the company’s “engineering, sales, marketing, and services teams.”

Then, in June 2020, Tom Eacobacci, a former president, Americas for Cisco, joined BlackBerry as the Canadian firm’s president. In that role, he was in charge of the company’s sales, marketing and engineering functions.

Finally, in September, BlackBerry tapped former McAfee president and chief revenue officer, John Giamatteo, to lead its cybersecurity unit’s strategy, engineering and go-to-market” functions. Giamatteo will basically take over for Eacobacci, CNN reported. “Go-to-market” sounds like a synonym for sales efforts.

The rapid turnover of BlackBerry’s head of sales position suggests that its CEO, John Chen, has not been pleased with the company’s sales efforts in recent years. And that, in turn, of course, is bad news for the owners of BB stock.

And finally, Chen reported during the company’s Q2 earnings call on Sept. 22 that BlackBerry had not been able to complete the sale of a large portion of its patents. The CEO had previously indicated that the transaction — which I expect to meaningfully boost BB stock — would likely be completed by July 31.

Results Better Than They Looked

Seemingly overlooked by many was the fact that Blackberry’s Internet of Things revenue, which primarily consists of the sales generated by its QNX operating system, jumped nearly 30% YoY last quarter to $40 million.

And apparently unnoticed by even more pundits and people on the Street is the fact that, if BlackBerry’s Q2 licensing revenue had been the same as in Q2 a year earlier, the company would likely have been profitable last quarter, excluding a few items. Moreover, its cash flow would have been positive and its overall sales would have climbed meaningfully.

Importantly, Chen has explained that BlackBerry, for legal reasons, is refraining from realizing most of its Licensing revenue while the talks on its potential patent deal continue.

BlackBerry’s Licensing and Other revenue came in at $15 million last quarter and $108 million during the same period a year earlier. If the category’s sales had been $108 million last quarter as well, Blackberry’s overall Q2 top line would have risen 3.4% YoY to $268 million.

And let’s assume that all of the Licensing and Other unit’s gross margin remained constant with the same period a year earlier and that the increase in its gross profit would have flowed directly to its cash flow and profits. Under those conditions, my calculations indicate that the company’s Q2 cash flow and its profit, excluding a couple of items, would have been positive if it did not voluntarily forego most of its Licensing revenue last quarter.

Specifically, its operating profit, excluding only stock-related value adjustments on its debt and amortization, would have been $29 million in Q2. Meanwhile, its operating activities would have generated $40 million of cash.

Outlook Should Improve Soon

In the past, I’ve explained why BlackBerry’s partnership with Amazon (NASDAQ:AMZN) on an app store for connected cars should prove to be a huge needle-mover for BB stock.

Basically, the market for such apps is expected to be very large, and Amazon is an excellent partner for BlackBerry. Additionally, I’ve noted that Chen has said that the company has hired a meaningful number of top-notch sales professionals who should start contributing meaningfully to the company’s bottom line by the end of the year.

Staying on the sales force issue, I believe that Giamatteo could be a much better leader for the company’s Cybersecurity sales force than either Palma or Eacobacci, That’s because Giamatteo appears to have had much more responsibility for sales than either of his two predecessors (he was chief revenue officer when he left McAfee), while McAfee is much more focused on cybersecurity than Cisco, where both Palma and Eacobacci worked before joining Blackberry.

As a result of these points, I think Giamatteo will have much more knowledge on how best to sell Blackberry’s cybersecurity products and many more private-sector contacts to whom he can sell them than either of his two predecessors.

Finally, as for the patent sales, Chen indicated that he would abandon the talks by the beginning of November if the negotiations are still continuing then.

Therefore, I predict that, by the beginning of November, BlackBerry will either get a $1.5 billion-$2 billion cash infusion or it will return to generating positive cash flow and YoY revenue growth because it will begin recognizing much more licensing revenue. Either scenario should push BB stock much higher soon.

Valuation and Bottom Line on BB Stock

As of Sept. 28, BB stock had an enterprise value-to-revenue ratio of just 6.8, versus 50.76 for one of its key competitors, CrowdStrike (NASDAQ:CRWD). according to Yahoo Finance. It’s true that CrowdStrike is growing much more quickly than BlackBerry, but I expect BlackBerry’s growth to soar by the second quarter of next year.

By that time, the company’s new sales team, new head of sales, and auto app store should cause its top line to jump tremendously.

Meanwhile, BlackBerry’s profitability is much higher than it appears, while its sales force is being greatly improved, and it should get a big boost from its auto app store.

Given these points, in conjunction with the attractive valuation of BB stock, I continue to recommend buying the shares.

On the date of publication, Larry Ramer held a long position in BB. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Larry Ramer has conducted research and written articles on U.S. stocks for 13 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been GE, solar stocks, and Snap. You can reach him on StockTwits at @larryramer.