Shareholders of Box, Inc. (NYSE:BOX) will be pleased this week, given that the stock price is up 17% to US$18.62 following its latest third-quarter results. The results look positive overall; while revenues of US$177m were in line with analyst predictions, losses were 3.1% smaller than expected, with Box losing US$0.28 per share. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent forecasts to see whether analysts have changed their earnings models, following these results.
Taking into account the latest results, the latest consensus from Box's 13 analysts is for revenues of US$773.9m in 2021, which would reflect a meaningful 14% improvement in sales compared to the last 12 months. Per-share losses are expected to see a sharp uptick, reaching US$0.73. Before this earnings announcement, analysts had been forecasting revenues of US$774.7m and losses of US$0.85 per share in 2021. There was no real change to the revenue estimates, but analysts do seem more bullish on earnings, given the nice gain to earnings per share expectations following these results.
The average analyst price target held steady at US$17.25, seeming to indicate that business is performing in line with expectations. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Box analyst has a price target of US$22.00 per share, while the most pessimistic values it at US$11.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
In addition, we can look to Box's past performance and see whether business is expected to improve, and if the company is expected to perform better than wider market. We would highlight that Box's revenue growth is expected to slow, with forecast 14% increase next year well below the historical 23%p.a. growth over the last five years. Compare this to the other companies in this market with analyst coverage, which are forecast to grow their revenue at 12% per year. So it's pretty clear that, while Box's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The most important thing to note from these estimates is that the consensus increased its forecast losses next year, suggesting all may not be well at Box. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Box going out to 2022, and you can see them free on our platform here..
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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