Box Inc (BOX) StockTanked Despite Crushing Q1 Estimate

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Analysts at JP Morgan lowered rating on BOX Stock from Overweight to Neutral, following first quarter results

Box Inc (NYSE:BOX) shares tanked more than 10% in the last extended market trading session, right after the company disclosed financial results for the 1st 2016 quarter. Box managed to provide better results than expected, surpassing the Street’s expectations. However, the company provided weak guidance which caused the aforementioned decline in its share price. Analysts at JP Morgan slashed its rating from Overweight to Neutral, following its weak quarterly release.

The company reported $90.2 million of net revenue, versus the $88.65 million consensus estimates. Moreover, adjusted loss per share (LPS) came in at 18 cents, beating the Street’s estimates of 24 cents. Box Chief Financial Officer, Dylan Smith shed more light on the company’s quarterly performance while stating, “We are confident in our growth opportunity, driven by our product differentiation and expanding market, and we remain committed to achieving positive free cash flow in the fourth quarter of this fiscal year.”

Analysts at JP Morgan raised caution on the company and expect the stock to trade sideways in near term, primarily because of its soft quarterly performance. Furthermore, JP Morgan believes that Box’s recent changes in its billing terms can limit the share upside in the coming quarters. The research firm also made a downward revision in its price target from $18 to $14, citing 40% rise in share price since mid-February. During the quarter, the company acquired more than 5,000 new users while forming partnership with several large enterprises including the likes of Brooks Brothers, Airbnb and The Whirlpool Corporation.

Additionally, Box provided bleak outlook for full year 2016 as the company expects to post revenues between $391 and $395 million, in comparison to the Street’s estimate of $393.07 million. On the other end, Box is forecasting adjusted loss per share in 78-75 cents range whereas Wall Street expect the company to report 84 cents. Box shares have declined almost 9% since the start of fiscal year 2016, compared to NASDAQ Composite Index which slipped a little over 1% in the same time frame.

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