BOX - Box slips as Monness Crespi Hardt says growth will 'decelerate' ahead of Q2 results

Box ( NYSE: BOX ) shares slipped on Tuesday as investment firm Monness, Crespi, Hardt said it expects the cloud computing company's growth to decelerate when it reports second-quarter results next week.

Analyst Brian White, who has a neutral rating on Box ( BOX ) shares, noted that the company may "continue to tempt" value investors given its modest valuation and continued stock buybacks, but growth is likely to slowdown, as the economy looks to be weakening.

"After five consecutive quarters of accelerated revenue growth, our model reflects a deceleration to 16% [year-over-year] in [second-quarter of fiscal 2023] from 18% in [the first-quarter], but still above the 12% increase posted a year ago in [second-quarter of fiscal 2022]," White wrote.

The analyst added that the $248M the firm is expecting Box ( BOX ) to generate in sales would be up 4% sequentially, below the 6% average of the past July quarters.

A consensus of analysts expect Box ( BOX ) to report $244.9M in revenue and the company said it expects to generate between $244M and $246M in revenue and earnings per share of 27 or 28 cents.

Box ( BOX ) shares fell more than 1% to $30.61 in early trading on Tuesday.

In addition, White noted that Box ( BOX ) has made "significant improvement" in its operating margins over the past few years, going from 6.7% in the fourth-quarter of fiscal 2020 to 20.6% in the first-quarter of fiscal 2023. The analyst foresees that trend continuing, expecting 22.3% in operating margins in the quarter.

White also noted that deals worth more than $100,000 are expected to ramp up to be between 90 and 96, up from 60 in the prior quarter and 74 in the year-ago period.

Deferred revenue and billings, two key metrics for cloud computing companies, are expected to come in at $444.9 and $224.6M, respectively.

White also noted that Dropbox ( DBX ), a competitor to Box ( BOX ) in storage, reported "healthy" second-quarter results, but trimmed its revenue guidance for the rest of the year due to foreign exchange headwinds.

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