Should you buy Box shares after expanding its stock repurchase program?

By: Motiur Rahman
Motiur Rahman
Md Motiur enjoys researching how companies are solving challenges the world will face over the coming decades. In his… read more.
on Dec 1, 2021
  • Box shares on Wednesday surged more than 10%.
  • The company announced its FQ3 results Tuesday after markets closed, beating expectations.
  • Box also said it will increase its stock repurchase program by an additional $200 million.

On Wednesday, Box Inc. (NYSE:BOX) shares rocketed more than 10% after reporting its fiscal third-quarter results. The company announced its most recent quarterly results Tuesday after markets closed, beating analyst expectations on revenue and earnings. The cloud content management company also expanded its share repurchase program by an additional $200 million.

Box posted FQ3 non-GAAP earnings per share of $0.22, beating the average for analyst expectations of $0.21. On the other hand, its GAAP EPS of -$0.12 missed the consensus Street expectation of -$0.07, while revenue for the quarter increased by 14.3% from the same quarter last year to $224 million, exceeding estimates by $5.38 million.

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The company also issued its FQ4 and FY2022 revenue guidance above Street forecasts.

Should you bet on Box’s growth?

From an investment perspective, Box shares trade at a reasonable forward P/E ratio of 22.88, making it an interesting option for value investors.

Moreover, analysts expect its earnings per share to grow by more than 70% this year, before rising by a further 26.92% next year.

Therefore, the stock could also gain the interest of strategic growth investors.

Box shares have gained nearly 45% this year and more than 52% over the last 12 months.

Source – TradingView

Technically, Box seems to have recently spiked to complete a bullish breakout from a descending channel formation. As a result, the stock has now recovered from the oversold conditions of the 14-day RSI.

Therefore, with shares yet to reach overbought conditions, investors could target extended gains at about 426.94, or higher at $28.06, while $24.57 and $23.49 are crucial support levels.

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