3 Reasons to Sell BOX and 1 Stock to Buy Instead
In a sliding market, Box has defied the odds, trading up to $38.98 per share. Its 21.6% gain since December 2024 has outpaced the S&P 500's 1.8% drop. This was partly thanks to its solid quarterly results, and the run-up might have investors contemplating their next move.
Is there a buying opportunity in Box, or does it present a risk to your portfolio? Get the full breakdown from our expert analysts, it's free.
We're happy investors have made money, but we're cautious about Box. Here are three reasons why we avoid BOX and a stock we'd rather own.
A company's long-term sales performance is one signal of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last three years, Box grew its sales at a weak 6.6% compounded annual growth rate. This was below our standard for the software sector.
Forecasted revenues by Wall Street analysts signal a company's potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.
Over the next 12 months, sell-side analysts expect Box's revenue to rise by 7.7%, close to This projection doesn't excite us and indicates its newer products and services will not lead to better top-line performance yet.
Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.
Over the next year, analysts predict Box's cash conversion will slightly fall. Their consensus estimates imply its free cash flow margin of 27.2% for the last 12 months will decrease to 27.4%.
Box's business quality ultimately falls short of our standards. With its shares beating the market recently, the stock trades at 4.9× forward price-to-sales (or $38.98 per share). This valuation is reasonable, but the company's shakier fundamentals present too much downside risk. We're pretty confident there are superior stocks to buy right now. We'd recommend looking at one of our top software and edge computing picks.
Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
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