In light of International Business Machines Corp. (NYSE:IBM)’s new deal, is it time to buy Box Inc (NYSE:BOX)’s beleaguered shares? In an interview on Bloomberg, Box CEO Aaron Levie and IBM SVP for Analytics Bob Picciano revealed the new partnership, which involves the integration of IBM’s Watson analytics and security services into Box’s cloud platform. The deal also gives International Business Machines Corp. (NYSE:IBM) access to Box’s services through IBM’s software products. Box Inc (NYSE:BOX) debuted on the New York Stock exchange on January 26 and has had a rough go of it since then, with the stock dropping by 24.62% from the close on its maiden trading day to yesterday’s close of $17.51 per share. This new deal, which has been ironed out over the past nine months Levie revealed, may be just the breath of fresh air that the cloud services company needs to rebound from that rough ride since its IPO. Levie tells Forbes that the deal with International Business Machines Corp. (NYSE:IBM) will help his company make headway in attracting customers from the government, financial services, and healthcare industries. These customers have a need for very secure platforms enabling analytics and big data, accessed through user-friendly systems, which is exactly what the new deal between IBM and Box aims to create.
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It’s a mixed bag when it comes to Box Inc (NYSE:BOX)’s fourth quarter results for its fiscal year 2015, which ended on January 31. The firm reported an impressive 61.4% growth in revenue to $62.64 million versus the same quarter a year ago, and this figure was a strong $4.65 million above consensus. It’s important to note, nonetheless, that the firm missed earnings estimates widely, despite the greater than anticipated revenue, reporting a loss of $1.65 per share for its fiscal fourth quarter, well below the consensus of a loss of $0.48 per share. For its first quarter in the company’s fiscal year 2016, the firm reported a loss of $0.39 per share, still slightly more than the estimated loss of $0.37 per share set by analysts. Revenues for the company’s first quarter of fiscal 2016, which ended April 30 were $65.6 million, a 44.8% increase against the year-ago quarter and over the $64 million expected by analysts.
Though Box Inc (NYSE:BOX) seems to be continuously growing in terms of revenue, smart money appears not to be overly enthusiastic about the company. It should be noted that there were eight hedge funds followed by Insider Monkey which reported a long position in Box Inc by the end of the first quarter. However, the relatively small investment in Box is definitely not a sign of confidence, with many other less vaunted IPOs receiving much greater investments from the smart money.
