Why Is Box (BOX) Down 9.4% Since Last Earnings Report?

A month has gone by since the last earnings report for Box (BOX). Shares have lost about 9.4% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Box due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Box Q4 Earnings and Revenues Top Estimates, Rise Y/Y

Box, Inc. reported fiscal fourth-quarter 2020 earnings per share of 7 cents, which surpassed the Zacks Consensus Estimate by 3 cents. Moreover, the figure improved 22.5% year over year.

Total revenues came in at $183.59 million, surpassing the consensus mark by 1.1%. Moreover, the top line increased 12% year over year and was above the guided range of $181-$182 million.

Strong demand for its add-on products and high volume of large enterprise deals aided revenue growth during the quarter.

Box is currently working on enriching cloud content management and AI platforms. During the quarter, it made some notable partnerships and deeper integrations with U.S. Forest Service, Macquarie Bank, ATB Financial, Vice Media, Sekisui House in Japan and many more.

The company’s rich technology partner ecosystem will continue to be a strong driving force behind growth.

Let’s delve deeper into the numbers.

Billings and Deferred Revenues

Billings were $281.9 million, up 19% year over year. Deferred revenues were $423.8 million, up 13% from the year-ago quarter.

Operating Results

Box’s operating expenses (general & administrative, sales &marketing, as well as research & development) of $155.4 million increased 12.5% year over year.

On a non-GAAP basis, the company recorded operating income of $12.3 million versus $8.5 million a year ago. Operating margin was 7% versus 5% in the year-ago quarter.

Balance Sheet and Cash Flow

At the end of the quarter, cash and cash equivalents, and accounts receivables balance were $195.6 million and $209.4 million compared with $200.9 million and $108.4 million, respectively, at fiscal third-quarter end.

Net cash provided by operations was $15 million and free cash flow was $0.0 million in the fiscal fourth quarter.

Guidance

For the first quarter of fiscal 2021, Box expects revenues between $183 million and $184 million. On a non-GAAP basis, the company projects the bottom line within 4-6 cents. GAAP loss per share is expected within 23-25 cents.

For fiscal 2021, Box’s revenue guidance is expected within $771-$777 million. On a non-GAAP basis, it projects earnings per share in the range of 38-44 cents. GAAP loss per share is expected in the range of 71-78 cents.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates review.

VGM Scores

Currently, Box has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, 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 F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Box has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.