Box, Inc. has been on a roaring spree, with shares skyrocketing by 29.1% since the beginning of the year. This surge outpaces the Computer and Technology sector’s growth of 14.5% and the Zacks Internet Software industry’s return of 11%.
The company’s ascent can be traced back to its robust top-line expansion, expanding clientele, and a burgeoning partner network. In the second quarter of fiscal year 2025, BOX reported revenues of $270 million, marking a 3% climb compared to the previous year and beating the Zacks Consensus Estimate. Moreover, their non-GAAP earnings soared by 22.3% year over year, surpassing expectations.
BOX Raises Guidance on Strong Clientele
BOX boasts a solid clientele base, with over 1,800 customers shelling out at least $100,000 annually. Box AI has been a pivotal factor in driving this momentum, pushing suites to make up 87% of deals over $100,000 – a significant increase from the last year. The company’s Enterprise Plus division covers over 95% of these high-value transactions.
BOX revised its fiscal 2025 revenue and earnings outlook, now projecting revenues between $1.086-$1.09 billion which signifies a 5% year-over-year increase.
Box, Inc. Price and Consensus
Box, Inc. price-consensus-chart | Box, Inc. Quote
So, with an upwardly revised guidance and a formidable portfolio, can BOX maintain its upward trajectory? Let’s delve deeper.
Expanding Partner Base Aids BOX’s Prospects
Box is strengthening its cloud content management and AI platforms by bolstering its partner ecosystem. By integrating seamlessly with industry giants like Microsoft, Apple, IBM, Alphabet, and Salesforce, BOX is solidifying its market position. Noteworthy collaborations include integrating Azure OpenAI Service with Box AI, leveraging Google Cloud’s generative AI capabilities, and working with Apple on transformative content collaboration solutions.
Moreover, BOX recently acquired Alphamoon’s AI-powered Intelligent Document Processing technology and team, elevating its Intelligent Content Management platform.
BOX’s Q3 Guidance Positive
For the third quarter of fiscal year 2025, BOX anticipates revenues in the range of $274-$276 million, reflecting a 5% increase from the previous year. The company expects non-GAAP earnings of 41-42 cents per share, factoring in a projected 2-cent foreign exchange headwind. Additionally, BOX foresees mid-single-digit growth in third-quarter billings.
BOX Shares Overvalued
Despite the bullish sentiment surrounding BOX, the stock is currently trading at a premium, indicated by a Value Score of C. With a forward 12-month Price/Sales ratio of 4.21X compared to the industry standard of 2.5X, BOX shares appear overvalued.
Are Box Shares a Buy?
BOX’s well-rounded portfolio, extensive partner network, and expanding customer base make it an enticing prospect for investors, notwithstanding its inflated valuation.
BOX currently holds a Zacks Rank #2 (Buy) and carries a Growth Score of B, a positive blend as per Zacks’ methodology.
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