Yahoo Finance Why Shares of Box Inc. Tumbled Today
What happened
Shares of enterprise cloud storage provider Box (NYSE: BOX) slumped on Thursday following a fourth-quarter report that mostly beat analyst estimates. The company's guidance, however, fell short of expectations, prompting a double-digit plunge in the stock price. The stock was down about 20% at 12:10 p.m. EST.
So what
Box reported fourth-quarter revenue of $136.7 million, up 24% year over year and in line with the average analyst estimate. Billings jumped 28% year over year to $204.6 million, while deferred revenue rose 33% to $320.9 million. Box's paying customer base reached 82,000 businesses in the fourth quarter.
Image source: Box Inc.
Non-GAAP earnings came in at a loss of $0.06 per share, up from a loss of $0.10 per share in the prior-year period and $0.02 per share better than analysts were expecting. The company lost $0.24 per share on a GAAP basis, a $0.04 improvement compared to the prior-year period.
While's Box's fourth-quarter results were positive, the company's guidance was disappointing. Box sees first-quarter revenue between $139 million and $140 million, or between $142 million and $143 million excluding the effect of a new revenue-recognition standard. But both ranges fall short of the $144.3 million analysts were expecting.
For the full year, Box expects revenue between $602 million and $608 million, or between $613 million and $619 million excluding the accounting change. Analysts were expecting revenue of $625.7 million.
Now what
Box's revenue growth rate continues to gradually slow. The company sees revenue growing by about 19.5% in fiscal 2019, down from 27% growth in fiscal 2018. Box still isn't profitable, even on an adjusted basis, although free cash flow is positive.
With tough competition from industry giants, including Microsoft and Google, as well as the soon-to-IPO Dropbox, slowing growth may have investors rethinking the company's prospects.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Teresa Kersten is an employee of LinkedIn and is a member of The Motley Fool’s board of directors. LinkedIn is owned by Microsoft. Timothy Green has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A and C shares). The Motley Fool has a disclosure policy.
