Box, Inc. (BOX) shares have declined by over 8.6% in the past month, partly catalyzed by softer-than-anticipated forward guidance due to possible foreign exchange impacts on profit. Despite currency headwinds, Box’s Q4 FY2025 report showed increased billings by 5% and a near doubling of net profit to $194 million. The company has emphasized its ongoing investment in AI technology, heralding a new era of business transformation. The company’s guidance for Q1 FY26 predicts a revenue increase of 4% year-over-year. However, Box’s financial outlook reflects the expected impacts of FX headwinds and deferred tax expenses, leading analysts to offer a mixed view of the company’s valuation and growth prospects.
String of Wins Not Translating to Robust Growth Projections
Box offers a cloud-based single platform with capabilities in the areas of collaboration, content life cycle management, critical content security, and business workflow transformation enriched with enterprise AI.
The company has recently had a strong run, touting major wins or expansions with Toyota Motor Corporation, Sony Music Entertainment, Moelis & Company, AmTrust North America, the District of Columbia Government, and the Texas Department of Motor Vehicles.
The company’s Q4 revenue of $279.52 million exceeded forecasts by $0.32 million. The revenue for the full fiscal year was $1.09 billion, with a GAAP operating margin of 6.4% and a non-GAAP operating margin of 27.3%. Furthermore, Box reported a GAAP net income per share of $1.12, with a non-GAAP net income per share of $0.42, which is in line with expectations.
For the first quarter of 2026, Box anticipates revenue between $274 million and $275 million, reflecting an increase of 4-5% from the last fiscal year, though short of market expectations for $278.94 million. The company expects GAAP operating margin to be around 4% and non-GAAP operating margin to be around 25%, with adjusted EPS of $0.25 to $0.26, also short of consensus projections of $0.43.
Analyst Response Has Been Mixed
Despite the market’s immediate reaction, analysts have mostly remained bullish on the company while adjusting short-term expectations downward. For instance, Raymond James’ Brian Peterson has lowered his price target on the shares to $38 (from $40) while keeping an Outperform rating overall. Meanwhile, Morgan Stanley’s Josh Baer holds a more cautious stance, assigning a Hold rating with a price target of $36, noting that despite solid Q4 results and growth, several factors such as foreign exchange volatility, early renewals, and a modest top-line growth have made it difficult to evaluate fully.
Box is rated a Moderate Buy overall, based on recent recommendations of 10 analysts. The average price target for BOX stock is $36.63, which represents a potential upside of 16.47% from current levels.
Questions or Comments about the article? Write to editor@tipranks.com