Box Lives to Fight Another Day

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The provider of cloud-based collaboration software still has work to do to boost its valuation after defeating Starboard’s proxy challenge

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Box shares fell 11% over the next two weeks before backing up. The stock got another lift on Wednesday as the company kicked off its annual BoxWorks conference with the announcement of a slew of new offerings, including a revamped mobile app and a new e-signature service, as well as the larger Microsoft-powered workplace- With deep integration into collaboration platforms.handjob

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Zoom Video and Salesforce-owned Slack. Box shares closed Wednesday at their highest level since the September 9 meeting, up nearly 2%. The stock is also up 40% for the year, well above the 7% gain for the BVP Nasdaq Emerging Cloud Index.

But it still leaves the box with an enterprise value of nearly five times forward sales — one of the lowest valuations in a peer group that has at least a dozen stocks trading more than 30 times that. Box’s low multiple was a sore point for Starboard, which also launched its proxy challenge last year after a settlement with Box management. This may also leave the company vulnerable to other active investors. Dropbox—another cloud company with a mid-single-digit multiple—captured Elliott Management’s attention this summer.

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So Mr. Levy and the other box leaders still have their work finished for them. The wind is behind them. Morgan Stanley reported Wednesday that its latest survey of chief information officers showed that corporate information-technology spending is growing 4.4% this year, up from 3.8% predicted three months ago. Cloud computing and spending on so-called digital-transformation projects are priorities—a plus for the collaboration tools Box Box is selling to businesses managing a new mix of remote and on-site workers.

Eric Sapiger of JMP Securities upgraded Box to a “buy” rating last month, saying “sales execution has improved significantly,” and he predicted that new pricing strategies at the company would boost average deal sizes. will get. Box’s revenue growth has accelerated over the past two quarters. The company will need to keep up with that trend if it wants to improve its many and keep workers at bay. The clock is still ticking.

Dan Gallagher [email protected] . Feather

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