Box Earnings: Macro Pressures Continue To Hamper Results as Customers Dial Down Spending

We are maintaining our $30 fair value estimate for no-moat Box after the firm closed out its second quarter with mixed financial results. The company’s results for the quarter and outlook for the remaining half of fiscal 2024 were slightly below our expectations on sales and in line with our prior estimates on profitability. Zooming out, we continue to view Box as a small fish in a large content collaboration pond with the firm facing a tough competitive landscape. This thesis also underpins our no-moat rating for Box as we lack confidence in the firm’s ability to generate returns above its cost of capital in the long run. With shares trading down sharply after hours, we view Box’s shares as fairly valued and currently trading in the 3-star range.