Cloud computing stock Box pulled back after mounting a buy point above 32.00 last week. This software-as-a-service (SaaS) leader is Monday's IBD 50 Stocks To Watch pick.
Box, which serves clients stretching from the U.S. to Poland to Australia, unifies content collaboration, file storage, security, workflow, e-signatures and developer tools in one platform. It uses automation to streamline workflow, repeatable tasks and complex processes.
It serves over 100,000 customers in a vast array of industries, ranging from media to governments to nonprofit organizations. Two-thirds of Fortune 500 companies use Box services.
This cloud computing stock is ranked first out of 27 stocks in the Computer Software-Database industry group. The group climbed to 115th from the bottom of the 197 IBD groups three months ago, lifting from 149th four weeks ago.
Cloud Computing Stock Retreats From Buy Point
Box shares broke out of a base-on-base pattern Friday in lighter-than-average volume. The cloud computing stock pulled back Monday in general market weakness, and is back within 1% of the buy point. The stock formed a new base from a cup-with-handle base, trading sideways after a brief dip earlier this month following an analyst downgrade.
It is about 3% off its 52-week high.
Collaboration With Salesforce; Growing Revenue
Box announced enhancements for its Salesforce integration this month, helping businesses to securely connect teams.
In fiscal Q3 2023 earnings released in November, management projected 76% in 2023 full-year gross margin, up from 74% last year. Seventy-seven percent is targeted for fiscal 2025. Operating margin has risen, with 22.5% expected in 2023, up from 20% in fiscal 2022.
Full-year 2023 revenue is projected to grow 13%, with a 15%-17% target by 2025.
Quarterly earnings-per-share growth accelerated in the last three quarters, ranged from 12% to 18%.
Analysts expect impressive 38% EPS growth in 2023 and 25% in 2024. The "A" in the CAN SLIM investing strategy stands for annual earnings growth, and seeks out companies with at least 25% improvement.
Box reports fiscal Q4 2023 earnings in early March.
Cloud Computing Stock Keeping It Green
Box is committed to the environment with its Redwood City, Cal.-based headquarters LEED Gold certified. Box estimates it saved over 1 million plastic water bottles since 2017, and provided over 13,000 meals to the Peninsula Food Runners, to families in need.
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