Brian White: Time To Buy Box, It Has 50% Upside

Having grown sales 95 percent per year over the past four calendar years and having delivered 40 percent growth in FY16, with high recurring revenue, Drexel Hamilton’s Brian J. White believes that Box Inc BOX is undervalued at its current levels.

The analyst initiated coverage of the company with a Buy rating and price target of $18.

Underappreciated Stock

“Box is one of the more underappreciated and misunderstood cloud plays in the market today; however, we believe this will change as the company shows continued momentum in the enterprise market and Box Platform ramps in FY:17,” White mentioned.

White also stated that the company is well on its way to fulfilling its mission to “transform the way that people and organizations work,” with more than 44 million registered users at the end of FY16 and more than 57,000 paying customers, some of whom are large, global organizations.

The analyst believes that Box is well positioned, given its “laser-like” focus on the enterprise market, expanding product portfolio and innovative features.

The Way Forward

The company describes its Box Platform as the “next big frontier,” which would offer the potential to expand Box’s addressable market by “hundreds of millions” of users, while increasing the company’s value proposition in the eyes of the consumer.

Box has also entered into major partnerships, including ones with some of the largest tech companies, while following a meaningful market opportunity that is estimated at $32 billion in 2015 and expected to grow to $42 billion in 2018.