Box's Reacceleration Durability Remains Questionable Amid Competition Concerns, RBC Says
Box's (BOX) fiscal Q2 financial results were a step in the right direction, but questions remain about the durability of its reacceleration amid competitive concerns, RBC Capital Markets said in a Wednesday note.Analysts said the company reported "solid" fiscal Q2 results, with revenue, adjusted operating margin and billings beating expectations, while adjusted EPS was in line.RBC said net retention rate improved to 106% from 105% in the prior quarter, driven by higher seat expansion and strong retention within the Enterprise Advanced customer group.The investment firm said that while the company has capabilities to manage AI-related gross margin pressure, infrastructure costs and public cloud capacity constraints are expected to continue weighing on margins into next year.Analysts said the market dynamics that enabled the business turnaround in Japan were unique to the country and are unlikely to be repeated in other regions.RBC reiterated its underperform rating and a $26 price target on the stock.Price: $33.05, Change: $+0.05, Percent Change: +0.15%
