Why Box Stock Ticked Higher on Wednesday
Key Points
These were broadly in line with analyst expectations.
Management also made slight adjustments to annual guidance.
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Box (NYSE: BOX) didn't have much of a problem getting over the hump that is Hump Day. On news that its second-quarter results more or less met expectations, investors were cautiously optimistic on the online storage specialist's future, and traded its stock up by slightly over 1%.
Storage of value
The quarter saw Box post record revenue of just over $321 million, which was up by 9% on a year-over-year basis. This was accompanied by 17% growth in the company's billings to nearly $310 million.
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Net income not under generally accepted accounting principles (non-GAAP, or adjusted) also saw a double-digit rise. That line item increased by 12% to nearly $55.7 million, or $0.40 per share.
On average, analysts were modeling slightly more than $319 million in revenue, and that $0.40 per share for adjusted net income.
In its earnings release, Box cited its top-tier Enterprise Advanced plan as a key driver of growth for the quarter. The company said that clients were rapidly adopting the plan as they scale up their artificial intelligence (AI) capabilities.
Guidance tweaks
Box slightly modified its full-year guidance, raising its revenue projection but lowering its adjusted profitability forecast. The former got a bump to approximately $1.29 billion, from the previous $1.28 billion, while the latter was reduced slightly to $1.54 per share from $1.56.
The company is doing better than the market's tepid reaction on Wednesday would indicate. It still looks inexpensive on its valuations, although I'm not seeing the growth potential that other AI-adjacent tech companies currently boast. I'd say this stock is a mildly attractive buy, but there are higher-potential growth opportunities among such titles.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Box. The Motley Fool has a disclosure policy.
