Should you pay attention to changing Box (USA Stocks:BOX) fundamentals?

Box Inc (USA Stocks: BOX) presents a compelling investment opportunity from a fundamental perspective. The company's revenue stands at a robust $1.04B, backed by a healthy cash flow from operations of $318.73M. Despite a long-term debt of $370.8M, Box Inc's current valuation of $4.26B and a PEG ratio of 0.9674 indicate that the stock is reasonably priced relative to its growth prospects. Furthermore, with a return on equity of 0.3774, the company demonstrates a commendable ability to generate profits for its shareholders. Therefore, Box Inc could potentially be a game-changer in your investment portfolio.

Main Takeaways

Box Inc, currently undervalued at $28.98 per share, projects modest growth in the future. The company has a Sharpe Ratio, or Efficiency, of -0.0412, indicating a -0.0412% return per unit of risk over the past three months. Box Inc utilizes 22 distinct technical indicators to assess the volatility within its price movements. We recommend verifying Box's Standard Deviation of 1.67, mean deviation of 1.16, and Risk Adjusted Performance of -0.03 to corroborate the risk estimate provided.
Published over two weeks ago
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Reviewed by Raphi Shpitalnik

In the realm of technology, Box Inc (BOX) stands as a potential game-changer. This software infrastructure company, with a net asset of $1.24B and a current ratio of 1.03X, showcases a solid financial footing. Despite an operating margin of a mere 0.07%, the company has managed to generate a net income of $129M, a testament to its efficient cost management. With a price to book ratio of 32.07X, the stock might seem overvalued, but the company's robust free cash flow of $300.3M and positive net working capital of $162.9M paint a promising picture. The question remains: Is Box Inc the missing piece in your investment portfolio puzzle? Currently, Box Inc's Sales, General, and Administrative to Revenue ratio remains relatively stable compared to the previous year. The Research and Development to Revenue ratio is projected to increase to 0.33 in 2024, while the Price to Sales Ratio is expected to decrease to 3.43 in the same year. For those monitoring Box, it may not be the ideal time to purchase. The question remains whether investors will maintain their positions or if a sell-off is anticipated.
Typically, a company's financial statements are the reports that show the financial position of the company. There are three main documents that fall into the category of financial statements. These documents include Box income statement, its balance sheet, and the statement of cash flows. Potential Box investors and stakeholders use financial statements to determine how well the company is positioned to perform in the future. Although Box investors may use each financial statement separately, they are all related. The changes in Box's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Box's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet, but not equivalent to net income shown on the income statement. Please read more on our technical analysis and fundamental analysis pages.
The goal of Box fundamental analysis is to do accurate financial forecasts. There are several possible objectives to fundamental analysis, such as projecting of Box performance into the future periods or doing a reasonable stock valuation. The intrinsic value of Box shares is the value that is considered the true value of the share. If the intrinsic value of Box is higher than its market price, buying is generally recommended. If it is equal to the market price, it is recommended to hold; and if it is less than the market price, then one should sell all shares Box. Please read more on our fundamental analysis page.

How effective is Box in utilizing its assets?

Box Inc reports assets on its Balance Sheet. It represents the amount of Box resources that either has an existing economic value or will provide some form of benefits in the future. By effectively utilizing its assets, Box aims to generate revenue, control costs, drive operational efficiency, and enhance profitability. Optimizing asset utilization helps maximize shareholder value and maintain a competitive position in the Application Software space. To get a better handle on how balance sheet or income statements item affect Box volatility, please check the breakdown of all its fundamentals.

Are Box Earnings Expected to grow?

The future earnings power of Box involves the interaction of many company-specific, industry, and economic forces. Earnings estimates embody investors' opinions of Box factors such as sales growth, product demand, competitive industry environment, profit margins, and cost controls. Box stock prices adjust as these expectations change or are proven wrong. The main thing to remember is that equities with high expected earnings growth tend to underperform the market because it is usually difficult to meet the market's high expectations. Companies with low earnings expectations tend to do better than expected. Please use our latest analysis of Box expected earnings.

Box Gross Profit

Box Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Box previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Box Gross Profit growth over the last 10 years. Please check Box's gross profit and other fundamental indicators for more details.

A Deeper look at Box

Institutional investor usually refers to an organization that invests money in Box on behalf of clients or other money managers. Buying and selling of large positions of Box stock by institutional investors can create supply and demand imbalances that result in sudden price moves of Box stock. Let's take a look at how the ownership of Box is distributed among investors.

Ownership Allocation

The majority of Box Inc outstanding shares are owned by other corporate entities. These outside corporations are usually referred to as non-private investors looking to acquire positions in Box Inc to benefit from reduced commissions. Consequently, institutional investors are subject to a different set of regulations than regular investors in Box. Please pay attention to any change in the institutional holdings of Box Inc as this could imply that something significant has changed or is about to change at the company. Also note that nearly two million eight hundred ninety-nine thousand five hundred fourty invesors are currently shorting Box expressing very little confidence in its future performance.
Institutions
98.42%
Retail Investors-1.81
Insiders3.39
Institutions98.42
Please be aware that individual investors typically purchase shares for their personal accounts and usually in smaller quantities compared to institutional investors. While they might influence Box's decisions if they own a significant combined portion of its shares, such influence is relatively rare. Conversely, institutional investors - like mutual funds, pension funds, hedge funds, and other investment companies - often have a substantial sway over Box's decisions due to their larger holdings.

Asset Utilization

The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Box has an asset utilization ratio of 83.61 percent. This suggests that the Company is making $0.84 for each dollar of assets. An increasing asset utilization means that Box Inc is more efficient with each dollar of assets it utilizes for everyday operations.
Non Current Assets Total
293.8 M
Total Current Assets
555.6 M
Non Current Assets Total293.77 Million29.45
Non Currrent Assets Other169.76 Million17.02
Other Assets0.950.0
Other Current Assets21.39 Million2.14
Total Current Assets555.61 Million55.7
Intangible Assets49.11 Million4.92
Net Tangible Assets(92.1 Million)-9.23
"Never put all your eggs in one basket," is a common saying in the world of finance, and it rings true when considering Box Inc (BOX) as a potential addition to your investment portfolio. The software infrastructure company, with a healthy current ratio of 1.03X, demonstrates a strong ability to meet its short-term obligations, suggesting financial stability. The company's PEG ratio of 0.97X indicates that the stock may be undervalued given its earnings growth rate, presenting a potential opportunity for investors. Moreover, with a net income of $129.03M and a profit margin of 0.13%, Box Inc is not only profitable but also efficiently converting revenue into profit. However, investors should be mindful of the company's risk-adjusted performance of -0.03, indicating that the company's returns have not adequately compensated for the level of risk it has taken on.

Box is likely finish below $27 in 30 days

Box Inc's stock, with a standard deviation of 1.67, indicates high volatility, suggesting significant price fluctuations over short periods. This makes it a potentially risky investment, with the possibility of the stock falling below $27 in the next 30 days. Investors should monitor this stock closely. Despite this, Box Inc shows low volatility with a skewness of 1.98 and kurtosis of 10.38. Understanding market volatility trends can help investors time the market. Using volatility indicators properly allows traders to measure Box's stock risk against market volatility during both bullish and bearish trends. The increased volatility in bear markets can directly affect Box's stock price, causing stress for investors as they see their shares' value decrease. This often prompts investors to rebalance their portfolios by purchasing different financial instruments as prices drop.

Our Final Take On Box

While some firms in the software—infrastructure industry are either recovering or due for a correction, Box may not be as strong as the others in terms of longer-term growth potentials. With an impartial outlook on the current market volatility, it may be better to hold off any inventment activity and neither acquire nor sell any shares of Box at this time. The Box Inc risk-reward trade off is not appealing enough to do any trading. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Box.

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Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Ellen Johnson do not own shares of Box Inc. Please refer to our Terms of Use for any information regarding our disclosure principles.

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