Box Is One Of Oppenheimer's Top Picks For 2017

Box Inc BOX has delivered a steady performance and its transformation to a broad enterprise content platform is a positive, Oppenheimer's Ittai Kidron said in a report. He maintains an Outperform rating on the company, with a price target of $18, while naming the stock a top pick for 2017.

Kidron mentioned that Box had a few positives that investors seemed to underappreciate:

• The potential of the partnership with International Business Machines Corp. IBM, which could be “a source of sales upside (larger enterprise gains; international exposure)”
• The extent of the company’s enterprise relevance, “which already addresses content management/FSS, and increasingly incorporates content-focused collaboration, workflow, and analytics capabilities.”
• Box’s ability to deepen its enterprise stickiness or value as the company “seamlessly integrates” into the ecosystems of Microsoft Corporation MSFT and Alphabet Inc GOOG GOOGL.

Steady Performance And Upside

Box's has delivered a steady performance, with $2 million in revenues and $0.05 loss per share average upside over the past four quarters.

“While Box's billings growth has trailed its revenue growth recently, we expect trends to normalize in FY18 and believe this, combined with reaching positive FCF this quarter, would provide a positive lift for the shares,” Kidron write. He added that “management's steady execution combined with the additional leverage from newer products (Box Platform/Governance/Zones...) and IBM could drive more upside in CY17.”

At last check, shares of Box were up 1.26 percent at $15.24.