It has been a challenging time for Box Inc (NYSE:BOX), the file-sharing provider, but things are perhaps turning a corner on Thursday.
Yes, it is loss-making. Yes, it does face competition from everyone and their wife. But Box managed to turn a positive outlook with its earnings, and that's more than can be said for competitor salesforce.com Inc (NYSE:CRM) whose earnings also printed and its shares closed down 4.4% at $75.91.
Its competitors are often like-for-like such as Box, as well as less obvious ones, such as Google Drive and the generous – free – storage offered by email providers like Hotmail.
It also faces stiff competition from players which offer a more “function-friendly” approach to storage such as Evernote and Samsung Notes.
The EPS saga is not a happy one. Box lost an adjusted 14 cents per share for its latest quarter it announced with its earnings on Thursday - 5 cents less a share than estimated.
On the flipside, the online file sharing company saw revenue come in above Street forecasts, and Box raised its full-year outlook on improving sales.
That was enough for the stock to close up 1.75% at $13.98 on Thursday. But the momentum has been building for some time.
As reported earlier, Box shares also rose as it announced a contract win with Ipreo. Box, which released market-beating results after hours on Wednesday, said Ipreo, which provides market intelligence, data, and technology solutions, will use the Box platform to power its Prism application. Read more.
Perhaps fortuitously, the share price turned a corner on July 4 – US Independence Day – when it closed at $10.15. Since then it has continued to steadily rise or plateau. No declines for two months.
Analysts at Stifel expects Box to carry the momentum over to the next half. Box has been devoid of profitability since its inception, but it has gained considerable ground since it reported a net loss per share of $1.25 back in the fourth quarter fiscal 2015. Stifel’s Aaron Rakers believes that the catalysts are likely to be in Box’s favour if the execution is sustained.
The analyst has maintained a Hold rating and has not issued a price target on the stock as of yet.
Some analysts, such as those at Vetr, have downgraded Box to hold from buy, so not everyone is buying into the stock.
The real challenge for Box going forward is how to wrest back the initiative with cool features and a functional approach to what so far has been a glorified storage site for your photos and documents.