Will New Products & Partnerships Aid Box (BOX) Q1 Earnings?

Box, Inc. (NYSE:BOX) is set to report first-quarter fiscal 2020 results on Jun 3. In the last reported quarter, the company delivered a positive earnings surprise of 16.67%.

The surprise history has been impressive in Box’s case. The company surpassed estimates in three of the trailing four quarters, with average positive surprise of 3.96%.

Let’s see how things are shaping up for this announcement.

Factors at Play

Box invested in security, compliance and administrative technology during the fiscal first quarter. These investments with leading enterprises should help the company capitalize on increasing adoption of cloud computing technologies and the need for secure collaboration, in turn driving top-line growth in the quarter to be reported.

During the quarter, Box rode high on the back of increasing adoption of its cloud content management platform by existing and new customers, and the trend is likely to continue. The expanding paid customer base should aid its top-line growth in the to-be-reported quarter.

However, continuous investments in research and development may dent margins and profits, going forward.

For the quarter to be reported, it expects revenues in the range of $161-$162 million. We expect the company to deliver robust top-line growth in the fiscal first quarter, driven by strength across international markets and growing add-on products.

However, weakness in the EMEA region could impact its results.

On a non-GAAP basis, Box projects loss per share in the range of 6-5 cents for the to-be-reported quarter.

What Our Model Suggests

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially if these have a negative Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Box currently has a Zacks Rank #3 and an Earnings ESP of 0.00%, a combination suggesting that the company is unlikely to beat estimates.

Stocks to Consider

We see a likely earnings beat for each of the following companies in the upcoming releases:

Xilinx, Inc. (NASDAQ:XLNX) has an Earnings ESP of +1.05% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Citrix Systems, Inc. (NASDAQ:CTXS) has an Earnings ESP of +2.10% and a Zacks Rank #3.

Diana Shipping Inc. (NYSE:DSX) has an Earnings ESP of +53.85% and a Zacks Rank #3.

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