Box stock price forecast: more downside ahead of earnings

By:
on May 25, 2022
  • Box stock price has been in a freefall in the past few months.
  • The company’s business is stable but slowing.
  • The stock will likely keep falling ahead and after earnings.

The Box (NYSE: BOX) stock price has been in a steady downward trend in the past few months as concerns about the technology sector remain. The shares declined to a low of $24.61, which is the lowest it has been since February this year. It has fallen by more than 23% from its year-to-date high of $33, bringing its market cap to more than $3.9 billion.

Box earnings preview

Box is a small cap technology company that provides cloud storage solutions to companies and individuals. It operates in a relatively competitive industry where companies like Yandex, Google, Microsoft, Amazon, Apple, and DropBox dominates.

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In addition to cloud storage, Box provides other services to its global customers. For example, it competes with DocuSign in offering e-signature services. It also offers Box Relay, a product that automates workflows. 

Box has achieved a lot of success in the past few years. For one, the company serves more than 100k customers globally. Its customers include about 67% of all companies in the Fortune 500. Some of its top customers are companies like Morgan Stanley, Farmers Insurance, Intuit, and Broadcom. 

The Box stock price will be in the spotlight this week as the company publishes its quarterly results. Analysts expect that its revenue increased to $234 million in the first quarter from the previous $233.36 million. 

They also expect it to lose about $0.04 per share. Still, judging by the past, Box will likely beat analysts’ forecasts since it has done that in all quarters since it went public.

In addition to the headline figures, analysts will look to its forward guidance considering that its business is expected to slow. For one, companies that needed cloud storage have already subscribed. Like other firms, the stock will react to wage pressure that is facing many companies. Another key item to watch will be its Box Sign product and the uptake it is having internationally. 

Box stock price forecast

Box Stock Price

Turning to the daily chart, we see that the Box stock price has been in a strong bearish trend in the past few weeks. Along the way, the stock has managed to move below the important support at $28.15, which was the highest level on December 28th. The shares have moved below the ascending trendline shown in black. 

The stock has moved below the 25-day and 50-day moving averages while the Relative Strength Index (RSI) has been in a downward trend. I expect that the stock will decline sharply after its earnings since companies are slowing their investments.

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