Box (BOX): Another Beat, One Quarter Closer To Profitability - Stifel

December 1, 2016 6:42 AM EST
Get Alerts BOX Hot Sheet
Price: $17.02 +1.86%

Rating Summary:
    9 Buy, 6 Hold, 0 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 23 | Down: 34 | New: 34
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Stifel analyst, Aaron Rakers, reiterated his Hold rating on shares of Box, Inc. (NYSE: BOX) after the company reported revenue and EPS upside. F3Q17 revenue/EPS of $102.8M/-$0.14/sh topped his estimates of $100.7M/-$0.19.

Key takeaways:

1.) Adjusted billings grew a solid +30% y/y and ahead of the reported +25% y/y as Box reiterated expectations that billings growth will trail y/y revenue growth F4Q17 with key considerations including 10% of billings from multi-year prepayments in F4Q16 and a $4M of pull-forward from earlier-than-expected renewals in F2Q17. Box expects billings growth to be similar to revenue growth throughout F2018

2.) IBM drove 8 +$100k deals during the October quarter (vs. 8 deals in the prior quarter) – we will be focused on Box’s comments that it is beginning to see an inflection point of this relationship going into F2018

3.) GM% at 76.1% was ahead of our 73.3% estimate (guide at ~73%), with 3/4ths of the leverage from improved efficiencies and 1/4th from the change in the useful life of servers (vs. previous 2-3 years); Box also delayed a new data center launch into F4Q17 (expected to result in GM% of ~74% in F4Q17)

4.) Box reiterated its expectation of attaining positive FCF in F4Q17 (Jan ’17).

No change to the price target of $15.

For an analyst ratings summary and ratings history on Box, Inc. click here. For more ratings news on Box, Inc. click here.

Shares of Box, Inc. closed at $15.22 yesterday.

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