The software sector is heating up. As a group it ranks a lofty No. 3 on IBD's list of 197 industries. One of the leading lights in the group is Box. Its cloud-based platform enables companies and other organizations to manage content and collaborate. On Wednesday, the Relative Strength Rating for Box stock rose to 72, up from 67 the day before.
Box Stock In Cup Base; Joining The AI Fray
Box is in beta testing with Box AI, its artificial intelligence-targeted software. Box says on its website that users can "Ask Box AI anything and get answers in seconds — from summarizing a document to uncovering key findings inside a lengthy research study."
The 72 RS Rating is a good but not great rating. It shows that Box stock bested 72% of all stocks for price performance over the past year. The best-performing stocks typically have an RS Rating above 80 as they launch their largest run. However, the other ratings for the Redwood City, Calif.-based company paint a brighter picture.
The software company has a near-best 98 Earnings Per Share Rating out of a best-possible 99. Box stock also boasts a 90 Composite Rating, an amalgam of IBD's five other top ratings. Its A- Accumulation/Distribution Rating on an A+ to E scale, shows that big money investors like ETFs and mutual funds are eager buyers of its stock. The software group itself has an A+ Relative Strength Rating.
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Box stock is building a cup-without-handle base with a 34.98 buy point. See if it can clear the breakout price in heavy volume. It dropped to the bottom of the cup at an intraday low 24.63 on March 15 and began slowly building the right side. Box closed Wednesday at 30.98, down fractionally for the day.
Steady Earnings Growth This Past Year
The company posted 39% EPS growth in its most recent report, to 32 cents per share. The prior three quarter EPS rose 33%, 41% and then 54%. Sales grew 6% last quarter to $251.9 million, its weakest growth rate in a year. Look for the next report on or around Aug. 23.
Box stock earns the No. 11 rank among its peers in the 26-stock Computer Software-Database industry group. Progress Software and Dropbox are among the group's highest-rated stocks.
When looking for the best stocks to buy and watch, one factor to watch closely is relative price strength.
IBD's unique Relative Strength Rating measures market leadership with a 1 (worst) to 99 (best) score. The grade shows how a stock's price movement over the last 52 weeks holds up against all the other stocks in our database.
