Cloud computing storage Box (BOX) pulled back after mounting a buy point above 32.00 last week. This software-as-a-service (SaaS) leader is Monday’s IBD 50 Stocks To Watch pick.
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Box, which serves customers spanning from the US to Poland to Australia, unifies content collaboration, file storage, security, workflow, electronic signatures and developer tools in one platform. It uses automation to streamline workflow, repeatable tasks and complex processes.
It serves more than 100,000 customers in a wide range of industries, from media to governments to non-profit organizations. Two-thirds of Fortune 500 companies use Box services.
This cloud computing stock is the first of 27 stocks in the Computer Software Database industry group. The group climbed to 115th from the bottom of the 197 IBD groups three months ago, rising from 149th four weeks ago.
Cloud Computing Stock Retreats From a Buy Point
Box stocks broke out of a base-on-base pattern on Friday in lighter-than-average volume. The cloud computing stock retreated on Monday in general market weakness, and returned within 1% of the buy point. The stock formed a new cup-with-handle base, trading sideways after a brief plunge earlier this month following an analyst downgrade.
It’s about 3% off its 52-week high.
Collaboration With Salesforce; Growing Income
Box has announced improvements for its Salesforce (CRM) integration this month, helping businesses securely connect teams.
In the fiscal Q3 2023 earnings released in November, management projected a 76% in 2023 full-year gross margin, up from 74% last year. Seventy-seven percent is targeted for fiscal 2025. Operating margin has risen, with 22.5% expected in 2023, up from 20% in fiscal 2022.
Full-year revenue from 2023 is forecast to grow 13%, with a target of 15%-17% by 2025.
Quarterly earnings-per-share growth accelerated in the last three quarters, ranging from 12% to 18%.
Analysts expect impressive EPS growth of 38% in 2023 and 25% in 2024. The “A” in CAN SLIM’s investment strategy means annual revenue growth, and look for companies with at least a 25% improvement.
Box reports fiscal Q4 2023 earnings in early March.
Cloud Computing Stock Keeping It Green
Box is committed to the environment with its Redwood City, Cal.-based headquarters LEED Gold certified. Box estimates it has saved more than 1 million plastic water bottles since 2017, and provided more than 13,000 meals to the Peninsula Food Pantry, to families in need.
Follow Kimberley Koenig for more stock news on Twitter @IBD_KKoenig.
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