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On Wednesday, Citi analysts adjusted their outlook on Box, Inc. (NYSE:BOX), reducing the price target from $40.00 to $39.00 while still advocating a Buy rating for the company’s shares. Currently trading at $33.47, Box is currently fairly valued according to InvestingPro analysis, with the stock trading near its 52-week high of $35.74. The revision follows Box’s latest earnings report, which, despite surpassing expectations with a 2 percentage point currency constant beat and a $0.04 earnings per share beat, presented a mix of positive and challenging factors. The company maintains impressive gross profit margins of 78.38% and has achieved 4.09% revenue growth over the last twelve months.
The report highlighted strong bookings driven by early renewals, the duration of contracts, and the contribution from the recently launched Enterprise Advanced Suite. However, the company’s financial outlook indicated lower margins and earnings per share, influenced by the sale of data center assets and deferred tax expenses, which are expected to create a $0.56 headwind.
Citi’s analysts expressed optimism regarding Box’s performance, particularly noting the Enterprise Advanced Suite’s promising start in the first weeks after its release, which contributed to the bookings’ upside. They anticipate that this momentum will continue to support further gains in fiscal year 2026.
Despite the headwinds from the data center asset sale, which would have otherwise resulted in a 70 basis point expansion excluding hardware, and the deferred tax expense, Citi reaffirmed its confidence in Box’s strategic direction. InvestingPro data supports this confidence, showing Box maintains a "GREAT" overall financial health score, with 12 additional ProTips available to subscribers. Get access to the comprehensive Pro Research Report, part of the coverage of 1,400+ top US stocks, for deeper insights into Box’s financial health and growth potential. The firm’s analysts underscored the importance of the company’s solid bookings execution and the initial positive impact of the Enterprise Advanced Suite, which they believe could bolster Box’s outlook for the upcoming fiscal year.
In summary, Citi maintains a positive stance on Box stock, anticipating that the company’s current initiatives and performance in bookings will likely fuel further upside and contribute to a stronger fiscal year 2026.
In other recent news, Box Inc. reported its fourth-quarter 2025 earnings, exceeding Wall Street expectations with an earnings per share (EPS) of $0.42, slightly above the forecast of $0.41. The company’s revenue reached $279.5 million, narrowly surpassing the anticipated $279.47 million. Despite these positive financial results, Box’s stock experienced a decline in aftermarket trading, reflecting broader market concerns. Additionally, Box Inc. announced optimistic guidance for fiscal year 2026, projecting revenue between $1.155 billion and $1.160 billion, indicating a 6% growth. Analysts noted that Box’s focus on AI and content management continues to position it as a leader in the sector, with strategic investments planned to drive further growth. The company also reported a 13% increase in free cash flow year-over-year, reaching $255 million. As part of its ongoing strategy, Box plans to enhance its partner ecosystem and AI capabilities, aiming to improve its net retention rate from 102% to 103%.
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