Company Reports

We maintain our $25 fair value estimate for no-moat Box after the firm reported strong second-quarter results, with revenues aligned with our expectations and guidance and adjusted earnings per share exceeding our estimates. With a strong quarter, management also raised its full-year guidance. Despite these positive developments, we believe Box still has ground to cover before we consider making any material changes to our forecasts. Macro headwinds still loom large, and we await a clear inflection in demand for Box’s solutions.

We maintain our $25 fair value estimate for no-moat Box after the firm reported first-quarter earnings largely in line with our prior estimates. While macro pressures continue to hit Box’s business, we believe these headwinds will subside as fiscal 2025 progresses, with a demand-side recovery in fiscal 2026. However, looking beyond the near term, we continue to view Box as a small player in a large content collaboration pond. This thesis also underpins our no moat rating for Box as we lack confidence in the firm’s ability to generate returns above its cost of capital in the long run. With shares trading flat afterhours, we view Box’s shares as fairly valued and currently trading in the 3-star range.

We raise our fair value estimate for no-moat Box to $25 per share from $24, after the firm reported financial results largely in line with our prior estimates along with guidance that implied better profitability than our previous estimates. While near-term macroeconomic headwinds continue to bear down on Box’s business, we were encouraged to see management call out signs of stabilization in the company’s core markets. Beyond the near-term macroeconomic pressures, we continue to view Box as a small fish in a large content collaboration pond. This view also informs our no-moat rating for Box, as we lack confidence in the firm’s ability to outearn its cost of capital over the next decade. With shares trading up slightly following the company’s earnings report, we view Box as fairly valued relative to our updated valuation.

We believe Box has successfully carved out a niche for its product portfolio in a highly competitive enterprise collaboration space. With offerings encompassing the entire workflow stack of a business user, we believe the firm’s product portfolio stands to benefit from economic tailwinds in an increasingly digitized world.

We are reducing our fair value estimate for no-moat Box to $24 from $30 after the firm reported weaker-than-expected fiscal third-quarter results. Coupled with the weak set of results, management’s outlook for the upcoming fourth quarter and outlook for fiscal 2025 also left plenty lacking, in our opinion. Macro headwinds continue to have an impact on Box with cost-conscious customers continuing to double-check spending on Box’s solutions. Zooming out, beyond the near-term macro pressures, we continue to view Box as a small fish in a large content collaboration pond. This view also informs our no-moat rating for Box as we lack confidence in the firm’s ability to outearn its cost of capital over the next decade. With shares trading down sharply following the company’s earnings report, we view Box as fairly valued relative to our updated valuation.

We believe Box has successfully carved out a niche for its product portfolio in a highly competitive enterprise collaboration space. With offerings encompassing the entire workflow stack of a business user, we believe the firm’s product portfolio stands to benefit from economic tailwinds in an increasingly digitized world.

We are maintaining our $30 fair value estimate for no-moat Box after the firm closed out its second quarter with mixed financial results. The company’s results for the quarter and outlook for the remaining half of fiscal 2024 were slightly below our expectations on sales and in line with our prior estimates on profitability. Zooming out, we continue to view Box as a small fish in a large content collaboration pond with the firm facing a tough competitive landscape. This thesis also underpins our no-moat rating for Box as we lack confidence in the firm’s ability to generate returns above its cost of capital in the long run. With shares trading down sharply after hours, we view Box’s shares as fairly valued and currently trading in the 3-star range.

We are maintaining our $30 fair value estimate for no-moat-rated Box after the company clocked in a strong quarter to kick off fiscal 2024. The firm’s financials were marginally above our estimates for both sales and profitability. While the firm’s financial results have been solid over the last few quarters, we hold our opinion that Box faces an intense competitive landscape. We have previously highlighted Box’s strong upselling activity which has buoyed the firm’s net retention metrics despite lacking an economic moat. However, Box’s net retention rates for the first quarter contracted 500 basis points year over year due to client spending optimization against a turbulent macroeconomic backdrop. With shares trading up after hours, we believe that Box’s shares are fairly valued.

We are maintaining our $30 fair value estimate for no-moat Box after the firm reported fourth-quarter results largely in line with our estimates but provided a disappointing outlook heading into its fiscal 2024. While the firm’s financial results have been solid over the last few quarters, we hold our opinion that Box faces an intense competitive landscape marred by legacy ecosystems. We have previously been encouraged by Box’s ability to consistently increase its net retention rate despite lacking an economic moat. However, Box’s net retention rates contracted 300 basis points year over year as a result of slower headcount growth and budgetary conservatism. With shares trading down to $30.50 after market close, we believe shares are fairly valued.

We believe Box has successfully carved out a niche for its product portfolio in a highly competitive enterprise collaboration space. With offerings encompassing the entire workflow stack of a business user, we believe the firm’s product portfolio stands to benefit from economic tailwinds in an increasingly digitized world.

We are maintaining our fair value estimate for Box of $30 after the firm reported strong third-quarter results slightly above our estimates. While the firm’s financial results have been solid over the last few quarters, we hold our opinion that Box faces an intense competitive landscape marred by legacy ecosystems. While we do not justify an economic moat for Box, the firm has continued to maintain high levels of upselling activity, evidenced by its climbing net retention rate. With shares trading around $27.50 after market close, we believe Box is fairly valued.

We believe Box has successfully carved out a niche for its product portfolio in a highly competitive enterprise collaboration space. With offerings encompassing the entire workflow stack of a business user, we believe the firm’s product portfolio stands to benefit from economic tailwinds in an increasingly digitized world.

We are maintaining our fair value estimate for Box of $30 after the firm reported strong second-quarter results slightly above our estimates. While the firm’s financial results have been solid over the last few quarters, we hold our opinion that Box faces an intense competitive landscape marred by legacy ecosystems. While we do not justify an economic moat for Box, the firm has continued to maintain high levels of upselling activity, evidenced by its climbing net retention rate. Despite the firm operating against macroeconomic headwinds, Box remains confident in its ability to deliver robust growth, maintaining its revenue outlook and raising bottom-line estimates for the full year of fiscal 2023. With shares trading around $29 after market close, we believe Box is fairly valued.

We are resuming coverage of no-moat-rated Box with a $30 fair value estimate. Shares appear fairly valued to us. Our long-term forecasts are unchanged, as we hold our view that the firm’s offerings as a cloud-based services platform stands to benefit from secular tailwinds in an increasingly digitized world.

We are placing Box under review and expect to resume coverage in the near future.

We are maintaining our fair value estimate for Box of $30 after the company started its fiscal 2023 with strong financial results narrowly above our estimates. While the firm’s financial results have been solid over the last few quarters, we reiterate our opinion that Box faces an uphill battle in a competitive landscape marred by legacy ecosystems. While Box’s business does not warrant an economic moat, the firm has continued to maintain strong upselling activity, evidenced by the firm’s solid net retention rate. With shares trading around $25 after market close, we think Box is undervalued.

We are maintaining our fair value estimate for Box of $30 after the company posted its fourth-quarter earnings. Although Box has achieved gross margin expansion and upselling success, the firm still faces an uphill battle converting companies from legacy ecosystems that carry high switching costs. While we do not think Box has an economic moat, the company continues to see stickiness from its multiproduct sales strategy – exemplified by a 111% net retention rate, up from 102% year over year. With the share price up 5% after hours, we think Box is fairly valued.

We believe Box has successfully carved out a niche for its product portfolio in a highly competitive enterprise collaboration space. With offerings encompassing the entire workflow stack of a business user, we believe the firm’s product portfolio stands to benefit from economic tailwinds in an increasingly digitized world.

We are initiating coverage of Box with a fair value estimate of $30 per share, no economic moat rating, stable moat trend rating, and very high uncertainty rating. We currently view shares as fairly valued.

We believe Box has successfully carved out a niche for its product portfolio in a highly competitive enterprise collaboration space. With offerings encompassing the entire workflow stack of a business user, we believe the firm’s product portfolio stands to benefit from economic tailwinds in an increasingly digitized world.