Box Inc’s (NYSE:BOX) Earnings Dropped -2.09%, How Did It Fare Against The Industry?
When Box Inc (NYSE:BOX) announced its most recent earnings (31 January 2018), I did two things: looked at its past earnings track record, then look at what is happening in the industry. Understanding how Box performed requires a benchmark rather than trying to assess a standalone number at one point in time. Below is a quick commentary on how I see BOX has performed. See our latest analysis for Box
Was BOX weak performance lately part of a long-term decline?
For the most up-to-date info, I use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This blend enables me to analyze different companies on a similar basis, using new information. For Box, its most recent bottom-line (trailing twelve month) is -US$154.96M, which, in comparison to last year’s figure, has become more negative. Given that these figures may be fairly myopic, I have determined an annualized five-year figure for BOX’s net income, which stands at -US$159.77M. This means while net income is negative, it has become less negative over the years.
We can further analyze Box’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years Box’s top-line has risen by 30.78% on average, implying that the company is in a high-growth phase with expenses shooting ahead of revenues, leading to annual losses. Scanning growth from a sector-level, the US internet industry has been growing its average earnings by double-digit 14.78% in the prior twelve months, and 16.95% over the past five years. This means that whatever tailwind the industry is deriving benefit from, Box has not been able to gain as much as its average peer.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that incur net loss is always hard to envisage what will happen in the future and when. The most insightful step is to examine company-specific issues Box may be facing and whether management guidance has steadily been met in the past. I recommend you continue to research Box to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for BOX’s future growth? Take a look at our free research report of analyst consensus for BOX’s outlook.
Financial Health: Is BOX’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 January 2018. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
