Box (BOX 25.12, -2.66, -9.56%) is trading lower after the company reported
underwhelming FY19 first quarter results yesterday afternoon. Box is a leader
in enterprise cloud file storage.
First quarter revenue grew 20% to a record $140.5 mln. Cash flow from operations nearly doubled year/year to $18.4 mln as the non-GAAP net loss was nearly cut in half to $0.07/share.
One cause for concern stems from billings growth, which slowed to 17% in the first quarter from 28% in the fourth quarter.
Box guided second quarter and FY19 results in-line with Wall Street estimates.
It seems that expectations were too high coming in to this report. Box actually guided first quarter and FY19 revenue below consensus on March 1. However, the stock surged in April when Social Capital's Chamath Palihapitiya recommended the stock at Ira Sohn. He sees a stable business, a huge margin of safety working with 70% of the Fortune 500, and a huge opportunity to add value as artificial intelligence becomes more important. The stock subsequently broke out to an all-time high.
Box trades at just over 6x sales, which is toward the low end for the average high-quality enterprise cloud software company.
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