Market Overview

Box's Demand Trends 'Remain Healthy,' KeyBanc Says After Q1 Print

Box's Demand Trends 'Remain Healthy,' KeyBanc Says After Q1 Print

Box Inc (NYSE: BOX) reported Wednesday with first-quarter results that sent shares initially trading lower — but one analyst continues to see the bullish case for owning the stock. 

The Analyst

KeyBanc Capital Markets' Rob Owens maintains an Overweight rating on Box with an unchanged $33 price target.

The Thesis

Box's Q1 print consisted of upside to total revenue and adjusted billings, while better-than-expected costs of sales and operating expenses generated a 155-basis point operating margin upside, Owens said in a research report.

Encouragingly, Box signed four new deals worth more than $500,000 in the quarter versus two a year ago, and 35 new deals worth more than $100,000 compared to 26 last year.

The company's ongoing deal momentum should keep investors optimistic that top-line trends will grow in the bottom half of the fiscal year for five reasons, the analyst said:

  • Continued improvements in the go-to-market motion.
  • The ramp of new hires.
  • Nascent partnership traction.
  • Upcoming renewals of multiyear deals.
  • The appeal of newer and emerging solutions such as BoxReplay and Box Skills.

Box's platform differentiation — coupled with a low penetration rate of the existing base — should prompt investors to consider being buyers on the stock's pullback, as shares are trading at a discount valuation of 5.6x EV/CY19E versus peers that trade at a 6x multiple, Owens said. 

Price Action

Box shares were trading down by 5.5 percent premarket Thursday.

Related Links:

Box Inc Is A Buy On Sustained Growth, Favorable Competitive Trends, Says DA Davidson

12 Stocks To Watch For May 31, 2018

Latest Ratings for BOX

Nov 2019DowngradesMarket OutperformMarket Perform
Oct 2019Initiates Coverage OnHold
Sep 2019DowngradesNeutralUnderweight

View More Analyst Ratings for BOX
View the Latest Analyst Ratings

Posted-In: KeyBanc Capital Markets Rob OwensAnalyst Color Earnings News Price Target Reiteration Analyst Ratings Best of Benzinga


Related Articles (BOX)

View Comments and Join the Discussion!

Benzinga's Top Upgrades, Downgrades For May 31, 2018

The Market In 5 Minutes: Right To Try, Uber, Buffett, Jobless Claims And More