Equity Box down more than 20 percent after disappointing expectations 2019

Box’s share price fell dramatically today. During the stock exchange day in the United States, the value of shares fell by more than 24 percent. This was after the company not only reported poor results for the fourth quarter of 2018, but the forecast for 2019 was also disappointing.

Last November Box promised that it would be profitable for the first time. With a bit of creative calculation, that is indeed the case. Before deducting certain costs, Box stands at a profit of 6 dollar cents (5 euro cents) per share. That on a turnover of 163.7 million dollars (143.8 million euros), but if you include certain costs such as share compensation, then the company will end up with a loss. The loss amounts to some 19.6 million dollars (17.2 million euros). In addition, analysts had expected Box to have a turnover of 164.16 million dollars (144.2 million euros).

Unfavourable expectations

Although the results were not so bad, investors decided to sell their shares in the company. This can be explained by the combination of the somewhat disappointing results with disappointing expectations for the new fiscal year. Box states that it expects sales of between 700 and 704 million dollars (615 to 618 million euros). This is much less than what analysts expect; they assume a turnover between 713.9 and 749.9 million dollars (627.1 to 658.5 million euros).

The forecasts for the first quarter of this year are also disappointing. Box assumes 161 to 162 million dollars (141 to 142 million euros), whereas Wall Street expects 166.2 to 175 million dollars (146 to 153 million euros). So there are a lot of disappointing figures to report for Box. The fact that analysts assume more positive figures and that Box is unable to comply with them does not help.

As a result of this discrepancy, the profit Box made on its share price this year has partly been wiped out. In recent months, the share price has risen by 47 percent, but less than half of that has been achieved. CEO Aaron Levie, meanwhile, urges shareholders to calm down and states that there is enough room for optimism. The company is now taking longer to close large deals, but still sees high customer satisfaction and growing demand for cloud services.