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Cloud computing company Box (NYSE:BOX) is set for an investor event and its annual BoxWorks product event next week, with investment firm Monness, Crespi, Hardt expecting the company to give updates to its product offerings and the size of the market it's going after.
Analyst Brian White, who has a neutral rating on Box (BOX) shares, noted that the Aaron Levie-led company has "held up relatively well" in 2022, with shares down 6% year-to-date, compared to a 24% decline for the S&P 500, thanks to its modest valuation and "generous" stock buyback plan. But at the events, White is anticipating the focus to be on new innovations and partnerships designed to drive revenue.
"Given next week’s Virtual Investor Product Briefing is a product-focused event, Box is not expected to update its financial outlook," White wrote in a note to clients. "That said, we suspect analysts will be curious about current customer behavior patterns."
White added that Box (BOX) has made "notable strides" in expanding its portfolio in recent years, differentiating its platform compared to other competitors in the space, such as Dropbox (DBX).
At its analyst day in March, Box (BOX) said its financial target in 2025 would be a combined revenue growth and free cash flow margin between 43% and 44%, with revenue growth between 15% and 17%.
The company also said it expects gross margins of roughly 77% and an operating margin between 25% and 28%.
White said he also expects Box (BOX) may discuss new product strategies and market opportunities at the event. In March, it increased its total addressable market to roughly $74B by 2025, including $15.4B in the high-value cases and solutions segment, $14.8B in security and governance and $12B in file storage.
In March, Box (BOX) also showed off a three-year plan to reaccelerate growth built on three pillars: protection of content, worker empowerment and a better ability to connect an organization by integrating Box (BOX) and key applications.
Earlier this month, investment firm Citi said application software companies such as Box (BOX) are showing exceptional "quality" during the current economic environment and have opportunities in front of them.