Entering text into the input field will update the search result below

Box: Accelerating Digital Transformation Improves Outlook

Jun. 04, 2020 1:52 PM ETBox, Inc. (BOX)3 Comments
Stefan Ong profile picture
Stefan Ong


  • Box has launched several features to enhance its content management platform to remain the leader in this space.
  • The company has shown an uptick in non-GAAP operating margin this quarter.
  • Box's stock price does not seem overvalued based on its historical multiples.

Box Inc (NYSE: NYSE:BOX) has surprised analysts by an 11% improvement in its non-GAAP operating margin this quarter. The company's future growth will be driven by its ability to continue its land-and-expand model while innovating against larger competitors. Potential investors would have to pay 4.16 price-to-sales, which does not appear unreasonable based on Box's historical trading multiples.

There is a faster shift towards digital-first workplace

With the shelter-in-place situation, many companies had to allow their companies to work from home and build the infrastructure to support it. With these infrastructure investments, it is unlikely that companies would simply switch back to the old way of working once the situation improves. This shift will continue to drive demand for remote work solutions and cloud platforms like Box. Box CEO Aaron Levie highlights this from his experience:

We are at the beginning of what will be one of the most transformative periods in business history. Over the past couple of months, I have been speaking with dozens of CIOs and CEOs of Fortune 500 companies and it's very clear that building toward a digital-first workplace will be a key pillar in a much broader new normal for how organizations operate going forward. The opportunities for flexible work, global and virtual teams and reimagined business processes have always been a key element in our vision.

(Source: Box Transcript)

Box is strengthening its platform with more features

Box has continued to expand its integrations with partners like Teams and Zoom, where usage has grown dramatically over the past few months. This would help the company compete against larger companies like Microsoft (NASDAQ:MSFT) and Google (NASDAQ:GOOG) who have been increasing their presence in this space.

Box has also been launching multiple features such as automated malware detection and controls in Box Shield, Box for Slack integration

This article was written by

Stefan Ong profile picture
Focused on buying high-quality businesses and holding them for the long term. My initial investment strategy was to buy dividend-yielding stocks and REITs to generate passive income. This changed recently as I have more time to study companies. Besides, finding businesses that can reinvest earnings and compound returns at a higher rate is much more rewarding.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (3)

Box has recently had unusual options activity. Consequently, articles have pointed to Box as a takeover target. So here's some non-technical data I think about.
1. Customer base aquisition. DropBox, Zoom, Slack perhaps? Dropbox would benefit by gaining access to enterprise level cutomers.
2. Technology aquisition. Zoom recently announced hiring a VMware dude and working on encryption. An aquistion of Box would give Zoom or any company desiring to hold a chunk of this space access to encryption already in place and working across muliple platforms.
3. Integration: Video conferencing platforms are already integrating with Box.
4. Other than Facetime, Apple doesn't have an enterprise video conference solution. So what company will Apple aquire? Perhaps a couple of aquisitions to piece the multiple necessary aspects together. What new term will be coined once files/video conferencing are combined? Vitual Desk, One Desk, Apple Desk, Video Desk.
I am watching BOX. My company recently rolled out box. As a user of pc, mac, and a virtual machine I have begun putting my work on box for easy access from all devices from anywhere as well as allowing colleagues access. My only complaint is latency can be as much as 20 minutes.
I wish you had included who is there competition as this is a very competitive area. BOX looks interesting but I will wait. Your article was helpful but lacked my initial point.
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.