Box Earnings: Macroeconomic Pressures Persist, but a Solid Finish to Fiscal 2024

We raise our fair value estimate for no-moat Box to $25 per share from $24, after the firm reported financial results largely in line with our prior estimates along with guidance that implied better profitability than our previous estimates. While near-term macroeconomic headwinds continue to bear down on Box’s business, we were encouraged to see management call out signs of stabilization in the company’s core markets. Beyond the near-term macroeconomic pressures, we continue to view Box as a small fish in a large content collaboration pond. This view also informs our no-moat rating for Box, as we lack confidence in the firm’s ability to outearn its cost of capital over the next decade. With shares trading up slightly following the company’s earnings report, we view Box as fairly valued relative to our updated valuation.