Canaccord Genuity Cuts Price Target on Box (BOX) to $16 Following Mixed 1Q Report
Canaccord Genuity maintained a Buy rating on Box, Inc. (NYSE: BOX), and cut the price target to $16.00 (from $18.00), following the company's 1Q earnings report. Box reported a mixed quarter with revenue and adjusted EBITDA at $90.2M and ($12.1M), ahead of Canaccord's respective estimates by $1.7M and $6.7M. Calculated billings however, came in at $75.9M, missing estimates by $11.6M.
Analyst Richard Davis commented, "Box reported a solid headline quarter, but the moving parts of seasonality and changing billing terms didn’t accurately get into consensus (or our) forecasts, this caused confusion, and when you are a still controversial money-losing company that means one thing: a modest, but still disappointing stock price swoon. We get it, non-linearity is frustrating. However, our core assertion is unchanged: Box is far more differentiated than investors comprehend, which should lead to sustainable growth and, more or less inexorably, FCF profitability in Q4 of this year, followed by a consistent margin expansion ramp of 200-300 basis points per year for several years thereafter. The resulting beat down is deserved, but it also presents an opportunity to buy a promising company at what is likely to prove to be a compelling and temporary discount."
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Shares of Box, Inc. closed at $12.81 yesterday.