Will New Cloud Products Help Box (BOX) Beat on Q3 Earnings?

Box, Inc. BOX is set to report third-quarter fiscal 2018 results on Nov 29. Last quarter, the company delivered a positive earnings surprise of 15.4%.

The surprise history has been strong in Box’s case. The company surpassed estimates in each of the trailing four quarters, with an average four-quarter positive surprise of 17.98%.

The company's shares have increased 69.7% year to date, outperforming the industry’s gain of 36.2%.

Let’s see how things are shaping up for this announcement.

Factors at Play

Box’s fiscal second-quarter loss was lower than the Zacks Consensus Estimate. Also, revenues of $122.9 million were above the Zacks Consensus Estimate.

For the upcoming quarter, Box expects revenues in the range of $128-$129 million. The Zacks consensus estimate is pegged at $128.6 million.  We expect the company to continue delivering robust top-line growth in the fiscal third quarter driven by strength across international markets, including EMEA and Japan, and growing add-on products.

Also, the company has been continuously investing in security, compliance and administrative technology, and has plans of hiring more sales personnel. These investments and partnerships with leading enterprises, namely Cognizant, Google and Adobe among others, will help the company to capitalize on increasing adoption of cloud computing technologies and the need for secure collaboration.

However, continuous investments in research and development could dent margins as well as profits going ahead.

On a non-GAAP basis, the company projects loss per share in the range of 13 cents to 14 cents for the upcoming quarter. The Zacks Consensus Estimate is pegged at loss of 13 cents.

What Our Model Suggests

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks are best avoided, especially if these have a negative Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Box has a Zacks Rank #3 but an Earnings ESP of -1.96%, a combination that does not suggest that the company is likely to beat.

Box, Inc. Price and EPS Surprise

 

Box, Inc. Price and EPS Surprise | Box, Inc. Quote

Stocks to Consider

You could consider the following stocks with a positive Earnings ESP and a favorable Zacks Rank.

NVIDIA Corporation NVDA with an Earnings ESP of +1.31% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

VMware, Inc. VMW with an Earnings ESP of +0.79% and a Zacks Rank #3.

Broadcom Limited AVGO with an Earnings ESP of +0.51% and a Zacks Rank #3.

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