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Box (BOX) Gears Up for Q4 Earnings: What's in the Cards?

By Zacks Investment ResearchStock MarketsFeb 25, 2021 07:37AM ET
www.investing.com/analysis/box-box-gears-up-for-q4-earnings-whats-in-the-cards-200563225
Box (BOX) Gears Up for Q4 Earnings: What's in the Cards?
By Zacks Investment Research   |  Feb 25, 2021 07:37AM ET
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Box, Inc. BOX is set to report fourth-quarter fiscal 2021 results on Mar 2. In the last reported quarter, the company delivered an earnings surprise of 42.9%.

For the to-be-reported quarter, the Zacks Consensus Estimate for earnings has remained stable at 17 cents per share over the past 30 days.

The consensus mark for revenues is pegged at $196.5 million, implying growth of 7% from the year-ago reported figure.

Let’s see how things have shaped up for this announcement.

Factors at Play

During fiscal third-quarter 2021, the demand for Box’s cloud content management solutions for companies of all sizes increased. The trend is expected to have continued in the to-be-reported quarter due to the prevailing work-from-home concept. Its remote-working software and services are expected to have got a boost and in turn expanded the top line in the quarter.

Box invested in security, compliance and administrative technology during the fiscal fourth quarter. These investments helped the company capitalize on the increasing adoption of cloud computing technologies and need for secure collaboration. This, in turn, is likely to have driven top-line growth in the quarter to be reported.

Box rode high on the back of increasing adoption of the cloud content management platform by existing and new customers, including Microsoft (NASDAQ:MSFT), IBM (NYSE:IBM), Splunk (NASDAQ:SPLK), Adobe (NASDAQ:ADBE), Google (NASDAQ:GOOGL) and many others. The expanding paid customer base is anticipated to have aided its top-line growth in the to-be-reported quarter.

Box was chosen by the U.S. Department of Veterans Affairs as its content management platform to reform the latter’s technical infrastructure. This deal is expected to have further expanded Box’s customer base. With growing deployment of the platform, the company is expected to have expanded top-line growth.

Moreover, strength across international markets and growing add-on products might have aided the to-be-reported quarter’s earnings.

However, weakness in some of the regions served may reflect on the upcoming results. Also, investments in research and development may have dented margins and profits in the quarter to be reported.

For the quarter to be reported, it expects revenues in the range of $196-$197 million. On a non-GAAP basis, Box projects earnings per share in the range of 16-18 cents.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Box this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here as you will see below.

Earnings ESP: The company has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Currently, Box has a Zacks Rank #4 (Sell).

Stocks That Warrant a Look

Here are a few stocks worth considering, as our model shows that these have the right combination of elements to deliver an earnings beat in the upcoming releases.

Equifax (NYSE:EFX), Inc. EFX has an Earnings ESP of +6.66% and carries a Zacks Rank #2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Vipshop (NYSE:VIPS) Holdings Limited VIPS has an Earnings ESP of +6.25% and a Zacks Rank #3, currently.

CrowdStrike Holdings (NASDAQ:CRWD) Inc. CRWD has an Earnings ESP of +13.92% and carries a Zacks Rank #2, at present.

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Box (BOX) Gears Up for Q4 Earnings: What's in the Cards?
 

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Box (BOX) Gears Up for Q4 Earnings: What's in the Cards?

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