MUFG Analyst Upgrades Box On Momentum, 'Multitude Of Opportunities'

Analysts at MUFG Securities found Box Inc BOX's earnings report convincing enough to upgrade the stock from Neutral to Overweight with a price target boost from $17.50 to $23.

Box executed well in its earnings report, led by at least a 30-percent growth in top line, bookings and billings, MUFG's Stephen Bersey said in a Wednesday note.

The earnings report also showed progress in the company's strategy to increase its integration with key content providers and also strengthening relationships with Amazon.com, Inc. AMZN's AWS and Workplace by Facebook Inc FB, among others. Partnerships like these are of "critical importance" for a content-focused company like Box, Bersey said.

The analyst also highlighted a few other key aspects of the earnings report, including its international performance, especially in Europe, where it faces a "multitude of opportunities" to win new business with multinational firms.

Large Deals In Focus

During the first quarter of Box's 2018 fiscal year, the company oversaw 25 deals of over $100,000, two of which were more than $500,000 and one deal of over $1 million. More than 60 percent of the six-figure deals had at least one ancillary product attached.

"We believe these large deals are a barometer of the company's operating momentum and we are impressed by the company's progress on this front," the analyst said.

Box's churn rate of 3.5 percent and net expansion rate of 17 percent demonstrates the strength of the company's products and ongoing momentum, Bersey said. The company could enjoy significant opportunities ahead to expand its deployments in terms of products and seats within its already existing customer base, the analyst said.

At last check, shares of Box were up 10.8 percent at $20.72.

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