What Can Box Do To Prevent Another Loss This Quarter?

Box, Inc. (BOX) Information Technology – Internet, Software & Services| Reports March 9, After Market Close

Key Takeaways

The Estimize consensus is calling for EPS of -$0.29 and revenue expectations of $82.22 million, right in line with Wall Street and our Select Consensus

This quarter Box launched a strategic partnership with IBM and released updates to some of its enterprise and security solutions

These heavy investments have put considerable pressure on margins, contributing to a number of the company’s earnings misses.

What are you expecting for BOX? Get your estimate in here!

Less than a year removed from its IPO, Box has watched shares plunge 46.8%. Box is not alone, in fact, enterprise technology has experienced a systemic drop off since the start of 2016. Box is coming off a modest third quarter in which it missed on the bottom line but beat sales estimates. The quarter was highlighted by a growing customer base, new product roll-outs and the launch of a strategic partnership with IBM. These initiatives are expected to bode favorably for Box when it reports fourth quarter earnings March 9, after the market closes.

The Estimize consensus is calling for EPS of -$0.29 and revenue expectations of 82.22 million, right in line with Wall Street and our Select Consensus. Compared to the year prior, this represents a 42% increase on the bottom line with sales estimates expected to grow 31%. In its relatively short time as a publicly traded company, Box has beat Estimize estimates a meager 33% but trumps Wall Street in 63% of reported quarter. Given the company’s heavy investments into expansion, Box is poised for to beat on the top line while also posting underwhelming earnings growth.

Box’s first year as a publicly traded company has been highlighted by increased investments into security, compliance and administrative technology. These investments positions Box to maintain strong revenue growth. On the other hand, continuous investments in R&D weighs heavily on the company’s margins and profits. In the past 7 quarters, Box increased its average number of subscribers per customer by 70% and billing per customer by 46%, both of which are direct effects from larger deals and strategic partnerships. In the past few months, Box has executed a long term deal with IBM, announced Box SDK for Salesforce and an update to its enterprise and security platforms. This Wednesday, investors will need to be convinced the company can generate a profit and turnaround its wavering shares.