It has been about a month since the last earnings report for Box (BOX). Shares have added about 0.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Box due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Box Q2 Loss Narrower Than Expected, Revenues Beat
Box, Inc.'s fiscal second-quarter 2019 adjusted loss was 5 cents per share, narrower than the Zacks Consensus Estimate loss of 6 cents per share.
Revenues came in at $148.2 million, surpassing the consensus mark of $147 million. Revenues were also ahead of the guided range, increasing 21% year over year.
During the second quarter, the company had 87,000 paid customers, up from 85,000 in the first 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 its cloud content management and AI platforms. It has made some notable partnerships with Apple (AAPL) and Microsoft (MSFT).
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 $162.8 million, up 17% year over year. Deferred revenues were $301.5 million, up 25% from the year-ago quarter.
Box's operating expenses (general &administrative, sales & marketing, and research & development) of $142.8 million increased 10.5% year over year.
On a non-GAAP basis, the company recorded an operating loss of $6.5 million compared with $14.9 million a year ago. Operating margin was (4%) compared with (12%) in the year-ago quarter.
Balance Sheet and Cash Flow
At the end of fiscal second quarter, cash and cash equivalents, and accounts receivables balance were $203.7 million and $114.8 million, respectively, compared with $217.1 million and $91million at the end of first quarter.
During the quarter, cash provided by operations was negative $1.3 million and free cash flow amounted to negative $10.3 million.
For the third quarter of fiscal 2019, Box expects revenues between $154 million and $155 million. On a non-GAAP basis, the company projects loss per share in the range of 8-7 cents. GAAP loss per share is expected within29-30 cents per share.
For fiscal 2019, the company expects revenues between $606 million and $608 million. On a non-GAAP basis, the company projects loss per share in the range of 18-16 cents. GAAP loss per share is expected within $1.02-$1.00 per share.
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 -9.49% due to these changes.
At this time, Box has a strong Growth Score of A, a grade with the same score on the momentum front. However, 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 C. 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.
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