Box Earnings: Steady Start to Fiscal 2025 Even as Macro Pressures Continue to Hit Sales

We maintain our $25 fair value estimate for no-moat Box after the firm reported first-quarter earnings largely in line with our prior estimates. While macro pressures continue to hit Box’s business, we believe these headwinds will subside as fiscal 2025 progresses, with a demand-side recovery in fiscal 2026. However, looking beyond the near term, we continue to view Box as a small player in a large content collaboration pond. This thesis also underpins our no moat rating for Box as we lack confidence in the firm’s ability to generate returns above its cost of capital in the long run. With shares trading flat afterhours, we view Box’s shares as fairly valued and currently trading in the 3-star range.