Craig-Hallum: Box shares could jump another 50%

Shares of Box Inc (NYSE: BOX) are up 10% on Wednesday after the cloud company reported strong results for its fiscal third quarter, encouraging analysts to upgrade their price targets.

Chad Bennet raises price target to $38 a share

In a note this morning, Craig-Hallum’s Chad Bennet reiterated his “buy” rating on Box and raised his price target to $38 that represents a nearly 50% upside from here. Previously, the analyst had a PT of $31 on the stock.

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According to Bennet, the software company continues to report impressive growth in its revenue, both sequentially and on a year-over-year basis. Box is calling for an up to 13% increase in top-line this year that could serve as a catalyst for the stock in the coming months.

Other analysts who raised their price target on Box after the earnings report include Morgan Stanley’s Josh Baer and Raymond James Brian Peterson, both of whom see upside to $30 a share.

Highlights from CEO Levie’s interview on CNBC’s “TechCheck”

On CNBC’s “TechCheck”, CEO Aaron Levie said Box was now helping more than 100,000 customers with digital transformation. He reiterated that demand was incredibly strong, as evidenced in a 56% YoY increase in large deals.

Three massive trends are happening in the tech sector; hybrid work, digital transformation, and cybersecurity. Content sits at the centre of all three. So, much of the demand is driven by enterprises making strategic bets to manage their content in a more secure, scalable and broader way, and that’s where Box is playing.

According to Levie, Box will continue to collaborate with its shareholders for feedback on ways to improve the business. The management announced a $200 million share repurchase programme on the earnings call, which was also driven partially by such feedback. The CEO added:

Our content cloud strategy is to power the full life cycle of content from the moment you ingest your data to automating workflows and securing content. We’re going deeper into workflow automation. Ultimately, our platform can integrate with every other technology our customers are leveraging.

Box recently penetrated the e-signature market, and the response, as per Levie, has been tremendous.