A month has gone by since the last earnings report for Box (BOX - Free Report) . Shares have lost about 5.5% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Box due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Box Q3 Loss Narrower Than Expected, Revenues Beat
Box, Inc.’s fiscal third-quarter 2019 adjusted loss was 6 cents per share, narrower than the Zacks Consensus Estimate of 7 cents per share.
Revenues came in at $155.9 million, surpassing the consensus mark of $155 million. Revenues were also ahead of the guided range, increasing 21% year over year.
During the fiscal third quarter, the company expanded its paying customer base to more than 90,000 organizations, up from 87,000 in the fiscal second quarter.
The company’s top-line improvement was driven by growth in paid customers, growing add-on products and positive contribution from its strategic partnerships.
Box is currently working on enriching cloud content management and AI platforms. It has made some notable partnerships with Apple and Microsoft.
The company’s rich technology partner ecosystem will continue to be a strong driving force behind its growth.
Let’s delve deeper into the numbers.
Billings and Deferred Revenues
Billings were $155.6 million, up 10% year over year. Deferred revenues were $301.2 million, up 19% from the year-ago quarter.
Box’s operating expenses (general & administrative, sales & marketing, as well as research & development) of $150.7 million increased 9.7% year over year.
On a non-GAAP basis, the company recorded an operating loss of $7.7 million compared with $17 million a year ago. Operating margin was (5%) compared with (13%) in the year-ago quarter.
Balance Sheet and Cash Flow
At the end of fiscal third quarter, cash and cash equivalents, and accounts receivables balance were $200.1 million and $105.7 million, respectively, compared with $203.7 million and $114.8 million at the end of the fiscal second quarter.
During the quarter, cash provided by operations was $6.8 million and free cash flow amounted to negative $4.1 million.
For the fourth quarter of fiscal 2019, Box expects revenues between $163.5 million and $164.5 million. On a non-GAAP basis, the company projects earnings per share in the range of 2-3 cents. GAAP loss per share is expected within 21-20 cents.
For fiscal 2019, the company expects revenues between $608.2 million and $609.2 million. On a non-GAAP basis, the company projects loss per share in the range of 16-15 cents. GAAP loss per share is expected within $1.02-$1.00.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -9.5% due to these changes.
Currently, Box has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Box has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.