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Box (BOX) Gears Up for Q2 Earnings: What's in the Cards?

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Box, Inc. (BOX - Free Report) is set to report second-quarter fiscal 2020 results on Aug 28. In the last reported quarter, the company delivered a positive earnings surprise of 40%.

The surprise history has been impressive in Box’s case. The company surpassed estimates in all the trailing four quarters, with average positive surprise of 67.74%.

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

Factors at Play

Box invested in security, compliance and administrative technology during the fiscal second quarter. These investments with leading enterprises should help the company capitalize on increasing adoption of cloud computing technologies and the need for secure collaboration, in turn driving top-line growth in the quarter to be reported.

During the quarter, Box rode high on the back of increasing adoption of the cloud content management platform by existing and new customers. The expanding paid customer base should aid its top-line growth in the to-be-reported quarter.

However, continuous investments in research and development may dent margins and profits in the quarter to be reported and beyond.

For the quarter to be reported, it expects revenues in the range of $169-$170 million. We expect the company to deliver robust top-line growth in the fiscal second quarter, driven by strength across international markets and growing add-on products. The Zacks Consensus Estimate for the to-be-reported quarter’s revenues is pegged at $174.6 million.

However, weakness in the EMEA region could impact its results.

On a non-GAAP basis, Box projects loss per share in the range of 2-1 cents in the to-be-reported quarter. The Zacks Consensus for the quarter is pegged at a loss of 1 cent.

Box, Inc. Price and EPS Surprise

 

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 these 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.

Stocks to Consider

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

Infosys Limited (INFY - Free Report) has an Earnings ESP of +3.28% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Teradyne, Inc. (TER - Free Report) has an Earnings ESP of +0.23% and a Zacks Rank #2.

Texas Instruments Incorporated (TXN - Free Report) has an Earnings ESP of +0.50% and a Zacks Rank #2.

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