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Box (BOX) Gears Up for Q3 Earnings: What's in the Cards?

Box, Inc. BOX is set to report third-quarter fiscal 2021 results on Dec 1. In the last reported quarter, the company delivered an earnings surprise of 100%.

For the to-be-reported quarter, the Zacks Consensus Estimate for earnings has remained stable at 14 cents per share over the past 30 days.

The consensus mark for revenues is pegged at $194.04 million, implying growth of 9.5% from the year-ago reported figure.

Let’s see how things have shaped up for this announcement.

Factors at Play

During the fiscal second quarter, the demand for Box’s cloud content management solutions for companies of all sizes increased. The trend is expected to have continued in the to-be-reported quarter due to mounting coronavirus fears. This in turn is expected to have benefited the company. Its remote-working software and services are expected to have got a boost, which is likely to have expanded the top line in the quarter.

In addition, Box invested in security, compliance and administrative technology during the fiscal third quarter. These investments helped the company capitalize on increasing adoption of cloud computing technologies and the need for secure collaboration. This in turn is likely to have driven top-line growth in the quarter to be reported.

Also, Box rode high on the back of increasing adoption of the cloud content management platform by existing and new customers, including Microsoft, IBM, Splunk, Adobe, Google and many others. Expanding paid customer base is anticipated to have aided its top-line growth in the to-be-reported quarter.

During the third quarter, Box was chosen by the U.S. Department of Veterans Affairs as its content management platform to reform the latter’s technical infrastructure. This deal is expected to have further expanded Box’s customer base. With growing deployment of the platform, the company is expected to have expanded top-line growth.

Moreover, strength across international markets and growing add-on products might have aided the to-be-reported quarter’s earnings.

However, weakness in some of the regions served by the company may reflect on the upcoming results. Also, investments in research and development may have dented margins and profits in the quarter to be reported.

For the quarter to be reported, it expects revenues in the range of $193-$195 million. On a non-GAAP basis, Box projects earnings per share in the range of 13-15 cents.

Box, Inc. Price and EPS Surprise

Box, Inc. price-eps-surprise | Box, Inc. Quote

What Our Model Says

Our proven model does not conclusively predict an earnings beat for Box this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here as you will see below.

Earnings ESP: The company has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Currently, Box has a Zacks Rank #4 (Sell).

Stocks That Warrant a Look

Here are a few stocks worth considering, as our model shows that these have the right combination of elements to deliver an earnings beat in the upcoming releases.

RH (RH) has an Earnings ESP of +0.94% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Signet Jewelers Limited SIG has an Earnings ESP of +13.95% and a Zacks Rank #2.

American Outdoor Brands, Inc. AOUT, currently a Zacks #3 Ranked stock, has an Earnings ESP of +4.00%.

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