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Investing.com - UBS downgraded Box Inc (NYSE:BOX) from Buy to Neutral on Thursday, while lowering its price target to $36.00 from $42.00. The company, which maintains impressive gross profit margins of 79%, has seen 4 analysts revise their earnings expectations downward for the upcoming period, according to InvestingPro data.
The rating change reflects UBS analyst Seth Gilbert’s view that Box’s core business will remain stable, but near-term upside appears limited.
UBS expressed more optimism about customers upgrading to the new Enterprise Advanced (AI) SKU in 2027, but indicated it needs greater conviction before increasing estimates.
The firm projects revenue growth of approximately 7% in FY27/28, roughly in line with consensus estimates but below Box’s long-term guidance of 10-15%.
UBS forecasts free cash flow of $364 million and $414 million, which aligns with consensus estimates of $364 million and $405 million.
In other recent news, Box, Inc. reported second-quarter earnings that exceeded expectations, with revenue surpassing Street estimates by 1.1% and billings outperforming analyst consensus by 3.4%. The company’s non-GAAP operating margin also came in approximately 60 basis points above expectations. Following these results, RBC Capital raised its price target for Box to $26 while maintaining an Underperform rating. Raymond James reiterated its Outperform rating and maintained a $42 price target after noting strong performance across all metrics, including mid-teens growth in remaining performance obligations and a 3% beat on billings.
In the wake of the BoxWorks conference, DA Davidson reiterated its Buy rating and $45 price target, highlighting optimism about Box’s growth prospects and raised outlook for the year. UBS also maintained its Buy rating and a $42 price target, acknowledging new generative AI product announcements like Box AI Search Agent and Box Shield Pro, which are expected to drive additional monetization potential. These developments reflect Box’s ongoing efforts to enhance its product offerings and capitalize on emerging technologies.
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