Box, Inc. (NYSE:BOX) Is About To Turn The Corner
We feel now is a pretty good time to analyse Box, Inc.'s (NYSE:BOX) business as it appears the company may be on the cusp of a considerable accomplishment. Box, Inc. provides a cloud content management platform that enables organizations of various sizes to manage and share their content from anywhere on any device. With the latest financial year loss of US$54m and a trailing-twelve-month loss of US$39m, the US$3.9b market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Box will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.
See our latest analysis for Box
According to the 11 industry analysts covering Box, the consensus is that breakeven is near. They expect the company to post a final loss in 2022, before turning a profit of US$470k in 2023. Therefore, the company is expected to breakeven roughly 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 58%, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
We're not going to go through company-specific developments for Box given that this is a high-level summary, but, take into account that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before we wrap up, there’s one issue worth mentioning. Box currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. Oftentimes, losses exist only on paper but other times, it can be a red flag.
Next Steps:
There are key fundamentals of Box which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Box, take a look at Box's company page on Simply Wall St. We've also put together a list of key factors you should further examine:
Valuation: What is Box worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Box is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Box’s board and the CEO’s background.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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