Cloud content management and storage platform Box NYSE: BOX
stock has been a turnaround story during the pandemic
and is becoming a recovery play. The Company is back on track with growth as the COVID-19 pandemic has altered the way workforces
operate. The migration to cloud-based applications and sharing was accelerated as more employees worked and collaborated remotely
from home as the elastic workplace/office was born. This is part of the new normal even as the acceleration of COVID-19 vaccinations
lead to the return to the office. Box enables content management including videos, documents, projects, PDFs, and applications running on personal computers with secure sharing capabilities. Recognizing the need for collaborating with large and popular application providers, Box has partnered with technology partners like Zoom Video NASDAQ: ZM
, Microsoft Office 365 NASDAQ: MSFT
, Oracle NASDAQ: ORCL
, and Google Suite NASDAQ: GOOG.
Prudent investors seeking exposure to an enterprise reopening play
in the new normal can watch for opportunistic pullback levels to consider scaling into.
Q1 Fiscal 2022 Earnings Release
On May 27, 2021, Box released its fiscal first-quarter 2022 results for the quarter ending April 2021. The Company reported an earnings-per-share (EPS) profit of $0.18 excluding non-recurring items versus consensus analyst estimates for a profit of $0.17, a $0.01 beat. Revenues grew 10.2% year-over-year (YoY) to $202.4 million beating analyst estimates for $200.43 million. The remaining performance obligations of $864.8 million are up 20% YoY. Non-GAAP operating margin was 17%, up 8% YoY. Cash flow from operations was $94.8 million, up $32.9 million YoY. Box CEO and Co-Founder Aron Levie stated, “Our vision for the Content Cloud is resonating with our customers. They recognize the strategic importance of securing, automating, integrating, and collaborating on content, and are investing in the full power of Box. The strategy we've been executing on is yielding positive results as reflected in our strong start to FY22 and we’re poised to build on our leadership and drive our next phase of growth.”
Mixed Fiscal 2022 Guidance
Box lowered fiscal Q2 2022 EPS to a range of $0.17 to $0.18 versus $0.19 consensus analyst estimates on revenues of $211 to $212 million versus $209.56 analyst estimates. The Company lowered full-year EPS in the range of $0.71 to $0.76 versus $0.80 consensus analyst estimates but raised top-line full-year 2022 revenue guidance to $845 million to $853 million versus $844.73 million.
Conference Call Takeaways
CEO Levie set the tone, “Our platform offers more critical functionality designed for the multi-cloud hybrid work environment in a seamless secure user experience than any other solution in the market today. We are building the leading Content Cloud for enterprises. Our strategy is to power, automate and integrate the complete content lifecycle. From the moment content is created through the entire content workflow in a single platform that enables our customers to thrive in a work from anywhere, digital first, highly insecure world.” He continued with details of partner collaborations coming to fruition, “More and more our customers are recognizing the strategic importance of consistent content availability and integrity, whether they’re collaborating on a project in Zoom, closing a quarter using Salesforce, or building a new product with Autodesk. This is illustrated in Q1 by the 48% year-over-year growth in enterprise deals over $100,000. Additionally, our multi-product suite sales are gaining strength, with our customers adopting and leveraging more of our Content Cloud functionality. As proof of this, we have experienced a record 49% attach rate of our suites this quarter in $100,000 plus deals, and we anticipate the growth of our multi-product plans continuing in the future.” The Company acquired SignRequest, a leading cloud-based digital signature service to develop Box Sign. To speed up cloud migration economically, the Company has also rolled out Box Shuttle to “migrate some of the most complex large scale content management environments at a lower cost and faster than ever.” He concluded, “We will expand data migration and workflow automation. Go deeper with our data security and compliance offerings, enable new ways to collaborate and publish content on Box and enhance insights and analytics, so customers can get the most out of their content. With over 100,000 customers on our platform, and exciting roadmap and a strategy that is already yielding results. We are building on our leadership in cloud content management and driving the next phase of growth.”
BOX Opportunistic Pullback Levels
Using the rifle charts on the weekly and daily time frames provide a broader view of the price action playing field for BOX stock. The weekly rifle chart has a stalled uptrend that peaked at the $$27.31 Fibonacci (fib) level. The weekly 5-period moving average (MA) is sloping down near the $24.83 fib as the 15-period MA attempts to hold at $23.73. The weekly stochastic has peaked and crossed back down off the 80-band. This triggered the weekly market structure high (MSH) sell trigger below $24.49. Keep in mind the weekly rifle chart is dormant uptrend. The daily rifle chart has been in a downtrend that formed a market structure low (MSL) buy trigger above $24.06. The daily 5-period MA is sloping up at $23.44 with the daily 15-period MA overlapping the $24.49 weekly MSH trigger. The daily lower Bollinger Bands (BBs) sit at the $21.64 fib. Bulls are watching the daily stochastic mini pup attempt to bounce through the critical 20-band. Prudent investors can monitor for opportunistic pullback levels at the $22.06 fib, $20.61 fib, $19.84 fib, $18.75 fib, and the $17.70 fib. The upside trajectories range from the $27.31 fib to the $34.44 fib. It’s also a good idea to watch peer DBX both stocks move together.
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