California-based Box (BOX) offers a cloud-based content platform that powers workplace collaboration and enables enterprises to accelerate business processes. Its customers include AstraZeneca (AZN), Panasonic, Morgan Stanley (MS), and the U.S. Air Force Reserve Command.
With this in mind, we used TipRanks to take a look at the latest financial performance and newly added risk factors for Box. (See Insiders’ Hot Stocks on TipRanks)
Q3 Financial Results
Box reported a 14% year-over-year increase in revenue to $224 million for its Fiscal 2022 third-quarter ended October 31, surpassing the consensus estimate of $218.5 million. It posted adjusted EPS of $0.22 versus $0.20 in the same quarter last year and beat the consensus estimate of $0.21.
Box recently added $200 million to its stock repurchase program, bringing the remaining repurchase capacity to $260 million as of November 29.
For Q4, Box anticipates revenue in the band of $227 million to $229 million and adjusted EPS in the range of $0.22 to $0.23. (See Box stock charts on TipRanks).
Risk Factors
According to the new TipRanks Risk Factors tool, Box’s main risk category is Finance and Corporate, representing 42% of the total 57 risks identified for the stock. The company recently added four new Finance and Corporate risk factors to its profile.
Box received a $500 million investment from KKR in its convertible preferred stock and granted it voting rights. KKR also secured a seat on Box’s board. Box says that for it to take certain actions, it will require the consent of a majority of its preferred stockholders like KKR. But it cautions that KKR’s interests may not align with the interests of other investors.
Box warns investors that its stock price may decline as a result of holders of its convertible preferred stock converting them into common stock. Furthermore, the company wants investors to know that holders of its preferred stock enjoy certain privileges that are not available to holders of its common stock.
The Finance and Corporate risk factor’s sector average is 40%, compared to Box’s 42%. Box’s stock has gained about 44% year-to-date.
Analysts’ Take
Following Box’s Q3 earnings report, Raymond James analyst Brian Peterson reiterated a Buy rating on Box stock and raised the price target to $30 from $29. Peterson’s new price target suggests 15.52% upside potential. In maintaining the bullish view on Box stock, the analyst cited the $200 million boost to the repurchase program and noted that growth improvement is not coming at the expense of profitability.
Consensus among analysts is a Moderate Buy based on 6 Buys, 2 Holds, and 1 Sell. The average Box price target of $30.71 implies 18.25% upside potential to current levels.
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