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Will New Products & Partnerships Aid Box (BOX) Q3 Earnings?

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Box, Inc. (BOX - Free Report) is set to report third-quarter fiscal 2019 results on Nov 28. In the last reported quarter, the company delivered a positive earnings surprise of 16.67%.

The surprise history has been impressive in Box’s case. The company surpassed estimates in three of the trailing four quarters, with average positive surprise of 13.54%.

Its shares have lost 19.5% on a year-to-date basis compared with the industry’s decline of 2.7%.

 

 

Let’s see how things are shaping up for this announcement.

Factors at Play

Box’s fiscal second-quarter loss of 5 cents was narrower than the Zacks Consensus Estimate of 6 cents. Revenues of $148.2 million, however, surpassed the Zacks Consensus Estimate of $147 million.

For the quarter to be reported, it expects revenues in the range of $154-$155 million. We expect the company to continue delivering robust top-line growth in the fiscal third quarter, driven by strength across international markets, including EMEA and Japan, along with growing add-on products.

It has been continuously investing in security, compliance as well as administrative technology, and plans to hire more sales personnel going forward. These investments and partnerships with leading enterprises, namely Cognizant, Google and Adobe, among others, will help the company capitalize on the increasing adoption of cloud computing technologies and need for secure collaboration.

However, continuous investments in research and development could dent its margins as well as profits, going ahead.

On a non-GAAP basis, it projects loss per share in the range of 8-7 cents for the to-be-reported quarter.

What Our Model Suggests

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially if they have a negative Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Box currently has a Zacks Rank #3 and an Earnings ESP of 0.00%, a combination suggesting that the company is unlikely to beat estimates.

Box, Inc. Price and EPS Surprise

 

Box, Inc. Price and EPS Surprise | Box, Inc. Quote

Stocks to Consider

We see a likely earnings beat for each of the following companies:

Lululemon Athletica Inc. (LULU - Free Report) has an Earnings ESP of +4.89% and carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Kroger Co. (KR - Free Report) has an Earnings ESP of +0.58% and a Zacks Rank #3.

Casey's General Stores, Inc. (CASY - Free Report) has an Earnings ESP of +6.17% and a Zacks Rank #2.

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