Box Stock Sinks Following Earnings Report

Shares of cloud storage company Box (BOX) tumbled Wednesday after offering an outlook for yearly revenue that was short of Wall Street's expectations. BOX stock plunged more than 12%.

Reporting after the close Tuesday, results inched ahead of analyst views. Box reported adjusted earnings of 36 cents a share for its fiscal 2024 second quarter, which ended July 31. Revenue of $261.4 million was up 6% from the same period last year. Analysts polled by FactSet called for adjusted earnings of 35 cents per share on $261 million in revenue.

But Box executives said they anticipate revenue between $1.04 billion and $1.044 billion for the fiscal year ending in January. Analysts polled by FactSet were projecting $1.05 billion. The company is projecting adjusted earnings per share of $1.48 for the fiscal year. That's based on the midpoint of its range, and is in line with analyst views.

"Continued focus on operational discipline resulted in Q2 operating margins and EPS above our expectations, as we delivered our fourth consecutive quarter of GAAP profitability," said Dylan Smith, co-founder and chief financial officer of Box, in a written statement.

He added: "While ongoing economic factors have affected our customers' IT budgets and put pressure on our projected fiscal 2024 growth rate, we remain committed to our long-term revenue growth targets as we continue to drive gross margin and operating margin expansion in FY24 and beyond."

Box stock plummeted 12.3% to close at 27.01 on the stock market today.

Box also announced that its board of directors authorized an expansion of its stock repurchase program by $100 million. In the previous quarter, the company repurchased 2.2 million shares for a total of $62 million.

The 18-year-old Box sells a suite of cloud-storage software tools that are used by 67% of the Fortune 500.

Box Chief Executive Aaron Levie said the company is well-positioned to benefit from its corporate customers utilizing artificial intelligence. The company launched its Box AI platform in May.

"With Box AI, we will be able to securely connect customers' enterprise content with the world's leading AI models, uniquely positioning Box at the center of the future of work," Levie said in a written statement.

Before its earnings release, BOX stock closed up just under 1% at 30.80 on the stock market today. The company's shares have fallen 1.4% in 2023 but are up 15% over the past 12 months.

Further, BOX holds a Relative Strength Rating of 74 out of a best-possible 99, according to IBD Stock Checkup. That's a hefty increase from its 44 score three months ago. The rating compares a stock's price over the last 52 weeks with that of all other stocks in IBD's database.

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