BOX - Box rises as Monness Crespi Hardt praises 'constructive' analyst day

2023-03-15 08:45:59 ET

Box ( NYSE: BOX ) shares rose nearly 2% in premarket trading on Wednesday after the content management and collaboration software company held its fiscal 2024 analyst day, which investment firm Monness, Crespi, Hardt found to be "constructive."

Analyst Brian White, who has a neutral rating on Box ( BOX ), said the company provided an overview of its long-term strategy, estimating that its total addressable market for fiscal 2025 is roughly $74B, including $12B in file storage, $15.4B in "high-value" use case and solutions and $14.8B in security and governance.

The company also spoke about artificial intelligence during the meeting, particularly as it relates to the success of Box Suites, which was seen as a "key theme," White added.

"Box believes AI has the potential to be powerful when it comes to content, especially in unlocking insights hidden within unstructured data (~80% of data)," White wrote in an investor note, adding that the company is in the "exploratory stages" on several AI-related initiatives.

Several new financial targets were also unveiled during the event, including a reduction in Box's ( BOX ) revenue growth plus free cash margin fiscal 2025 target to 40% to 42%, down from a prior view of 43% to 44%.

The company also expects free cash flow growth to be around 20% per year between fiscal 2023 and fiscal 2026, along with a long-term operating margin between 32% and 35% and annual revenue growth between 10% and 15%.

Nonetheless, White still expressed caution on the stock, due in part to uncertainty surrounding the global economy.

"Given the secular changes in the world of work, combined with Box’s undemanding valuation, improved margin profile, and generous stock repurchase initiatives, the stock may tempt value investors; however, we found the near-term trends revealed during the company’s recent earnings call unsettling and believe the darkest days of this downturn are ahead of us," White wrote.

Earlier this month, Box ( BOX ) reported fourth-quarter results that topped expectations .

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