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Box (BOX) Gears Up for Q4 Earnings: What's in the Cards?

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Box, Inc. (BOX - Free Report) is set to report fourth-quarter fiscal 2020 results on Feb 26. In the last reported quarter, the company delivered a positive earnings surprise of 100%.

For the to-be-reported quarter, the Zacks Consensus Estimate for earnings has remained stable at 4 cents per share over the past 30 days. This indicates a decline of 33.3% from the year-ago reported figure.

Notably, the consensus mark for revenues is pegged at $181.5 million, implying growth of 10.9% from the year-ago reported figure.

Let’s see how things have shaped up for this announcement.

Box, Inc. Price and EPS Surprise


Factors at Play

Box invested in security, compliance and administrative technology during the fiscal fourth quarter. These investments with leading enterprises helped the company capitalize on increasing adoption of cloud computing technologies and the need for secure collaboration. This in turn is likely to have driven 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, including the NHL, Los Angeles World Airports, DC Office of the Attorney General, Epic Games and impossible Foods. Expanding paid customer base is anticipated to have aided its top-line growth in the to-be-reported quarter.

Moreover, strength across international markets and growing add-on products might have aided the to-be-reported quarter’s earnings.

However, weakness in the EMEA region may reflect on its upcoming results. Also, continuous investments in research and development may have dented margins and profits in the quarter to be reported.

For the quarter to be reported, it expects revenues in the range of $181-$182 million. On a non-GAAP basis, Box projects earnings per share in the range of 4-5 cents.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Box this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here as you will see below.

Earnings ESP: The company has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Currently, Box has a Zacks Rank #3.

Stocks That Warrant a Look

Here are a few stocks worth considering, as our model shows that these have the right combination of elements to deliver an earningsbeat in the upcoming releases.

Broadcom Inc. (AVGO - Free Report) has an Earnings ESP of +1.72% and a Zacks Rank of 2.

Square, Inc.(SQ - Free Report) has an Earnings ESP of +3.59% and a Zacks Rank #3.

Applied Optoelectronics, Inc. (AAOI - Free Report) has an Earnings ESP of +8.12% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

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