Box Inc (NYSE: BOX) Is A Gem in Cloud Content Management

Box Inc (NYSE: BOX) recently reported its third quarter fiscal 2018 results, which indicated that overall revenues beat estimates, while earnings per share was in line with expectations. Despite the positive results reported by the cloud content management company, its stock price dipped by over 5% shortly after the earnings release.

Article Summary

Box Inc recently reported its Q3 results and experienced a significant pullback.

The company reported higher free cash flow levels as compared to Q2 results.

The company has strong fundamentals and is expected to maintain double digit growth.

Here’s the trading report on BOX.

The company is one of the most underappreciated cloud services company in the market, maybe because of its past history as a cash-burning entity. However, the company’s management has taken steps to steer it in the right direction, which was evidenced by the fact that the company reported positive free cash flow levels in the latest quarter.

The company continues to exhibit significant volatility associated with earnings reports given the sudden pullback witnessed after the Q3 and Q2 earnings release. However, the company has strong fundamentals as reported by its CEO Aaron Levie who stated that demand for its services remains strong. He also stated that the company was on track to closing some major deals in Q4.

Box currently boasts of revenues above $500 million and is expected to generate double digit revenue growth in the next quarter as well as into fiscal 2019. The most notable improvements reported by Box in its latest earnings report is the growth in cash flow from operations, which expanded by $20.9 million, while free cash flow grew to a positive $6.3 million in the latest quarter.

The company’s future appears quite promising, which implies that the stock is currently cheaply valued given that it is trading at 4x next year’s sales estimates. Savvy investors might use the latest pull back in the company’s stock price to open new positions or to increase their holdings in the company.

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