Box Inc. (BOX) is a cloud services platform that provides enterprises with cloud-based workflow and storage systems. Serving clients in retail, construction, life sciences, construction, government, media, healthcare and other industries, Box works with more than 97,000 companies – including 68% of the Fortune 500. Launched in 2005, the company operates in the Americas, Europe, and Asia-Pacific region, headquartered in California.
Valued at a market cap of $4.03 billion, Box’s stock is up 7% this year, driven largely by a rally following its Q4 results.
What is Driving BOX?
In particular, Box shares gained 8.62% in one session after its Q4 results on March 5th. The software company reported quarterly revenue of $262.9 million, in line with analysts’ expectations, while adjusted earnings of $0.42 per share beat Street estimates by $0.38 per share. For the full year, the SaaS provider reported revenue of $1.04 billion, with earnings of $0.67 per share.
For the current quarter ending in April, Box said it expects earnings in the range of $0.35 to $0.36 per share, on revenue of between $261 million and $263 million. For the full fiscal year, the company expects earnings in the range of $1.53 to $1.57 per share, on revenue of $1.08 to $1.09 billion.
Earnings and revenue guidance were slightly less than analysts expected, which management attributed primarily to the impact of currency fluctuations. About one-third of the company’s revenue is generated overseas, with 60% of that denominated in the Japanese yen — which recently hit the headlines for setting multi-decade lows against its overseas rivals.
However, investors overlooked the soft guidance and cheered news of a new integration with Microsoft ( MSFT ) Azure OpenAI, along with the launch of a new Box app for Apple ( AAPL ) Vision Pro.
“With advances in artificial intelligence, companies are accelerating cloud adoption and transforming the way they work with their content,” CEO Aaron Levie said in an earnings release. “Box is at the center of some of the most important trends in technology history as companies look to digitize and automate their operations, accelerate innovation with the power of artificial intelligence, and protect their most important data.”
Notably, Box shares also rose a few days before the quarterly announcement when S&P Dow Jones Indices announced the company’s inclusion in the S&P SmallCap 600 Index ($IQY) as of March 18. Shares rose 5% on the news, with the inclusion expected to draw buying into mutual funds and ETFs.
What is the analyst forecast for BOX shares?
Analysts have a consensus “Moderate Buy” rating on the stock, with an average price target of $31.10 – indicating a potential upside of 13.5% from current levels. Out of a total of 11 analysts covering the stock, 8 have a “Strong Buy” rating, 1 have a “Moderate Buy” rating, 1 have a “Hold” rating and 1 remaining analyst has a “Strong Sell” rating.
After earnings, Morgan Stanley analyst Josh Baer reiterated an “Overweight” rating on BOX shares, while raising his price target from $32 to $35. Separately, Oppenheimer reiterated that same high price target on Box, where analyst George Iwanyc also rates the stock “Overweight.” That $35 price target implies an expected upside of 27.7% from current levels.
As of the date of publication, Ruchi Gupta did not hold (either directly or indirectly) a position in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. For more information, see the Barchart Disclosure Policy here.
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