Its CEO, Mark Benioff, went as far as to say they’re “recession resilient.” Given robust demand and secular tailwinds, which are unlikely to wear off soon, it’s hard to argue with the resilience of enterprise tech in an economy that’s mostly weighed down by the consumer.Ĭould enterprise plays be the place to hide from coming market turbulence induced by a “consumer recession”? Possibly. Salesforce delivered blowout numbers in its quarter revealed last week. Still, it’s hard to ignore the resilience in enterprise spending thus far. Indeed, nobody wants to be caught offside as world economies tumble into a recession. The digital transformation is still very much in play, as the economy reveals more signs of weakness. Enterprise Spend Could Stay Resilient Ahead of Recession Though the recent plunge has been far milder than your average high-growth play, I think Box appears to be a baby thrown out with the bathwater in the recent round of selling. I am bullish on Box stock and think it represents excellent value in the tech industry after its latest pullback. Under the leadership of Aaron Levie, I do view Box as a firm that can execute, even in the face of a worsening economic storm.įurther, Box remains a smaller player in the cloud, making it an attractive - and digestible - takeover target for an enterprise behemoth like Salesforce ( CRM). Like many other SaaS companies, the firm may be able to upsell the existing roster of satisfied clients. Though revenue growth of 18% is nothing to get genuinely excited about, the firm has potential levers it can pull that may reward it with a “growthier” multiple in time. GAAP earnings per share are expected to be around $0.28 for the next quarter. For the full year, revenue is expected in the $992-996 million range, with per-share losses between $0.05-0.01. Revenue guidance for the second quarter now lies between $244-246 million, with a per-share loss in the $0.01-0.02 range. Management also increased its midpoint guidance on revenue and operating margins. Box is on the right track when it comes to margins, with non-GAAP operating margins surging to 21% in the latest quarter (Q1 Fiscal 2023). In this market, investors want to see profitability. Further, the company has steadily won over a lot of impressive clients while posting meaningful improvements on the profitability front. Today, Box stock trades at only 4.8 times sales. Why has Box been able to dodge and weave through the endless number of jabs thrown its way? Box stock was never expensive to begin with, and it’s not a cloud player known for its growth. Box Stock: A Steady Eddie in the Tech Scene At writing, Box stock is down just north of 18% from its all-time high at $33 and change per share. In fact, shares of the $3.9 billion cloud play have held steadier than many quality blue-chip stocks. However, unlike most other pandemic beneficiaries in tech, Box stock has not been quick to surrender its gains. Indeed, Box received a nice boost from the pandemic-induced push to remote work. It’s this pivot that’s helped Box differentiate itself from rivals. However, the company has made major strides in the area of collaboration tools. In many ways, cloud storage and content management are largely commoditized. On a relative basis, Box stock was mostly unscathed, especially versus the likes of some of its freshly-imploded peers in the software-as-a-service (SaaS) scene.īox may be viewed as just another provider of cloud storage by some. Shares of cloud-based content management platform Box ( BOX) have been a pillar of stability amid the tech-focused sell-off.
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