Why Is Box (BOX) Down 0.4% Since Last Earnings Report?

It has been about a month since the last earnings report for Box (BOX). Shares have lost about 0.4% in that time frame, underperforming the S&P 500.But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Box due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.BOX Q2 Earnings Beat Estimates, Revenues Up Y/YBox reported second-quarter fiscal 2026 non-GAAP earnings of 33 cents per share, which declined 25% year over year. The figure exceeded the Zacks Consensus Estimate by 6.45%.Total revenues of $294 million surpassed the consensus mark by 1.21%. The top line increased 9% year over year on a reported basis and 7% on a constant-currency (cc) basis.BOX’s Q2 Metrics in DetailBillings were $265 million in the reported quarter, increasing 3.3% year over year on a reported basis and 6% on a cc basis. The company generated 63% of its revenues from Suite’s customers in the second quarter of fiscal 2026. Box’s net retention rate was 103% at the end of the fiscal second quarter, up 100 bps year over year.The company’s remaining performance obligations (RPO) totaled $1.5 billion, up 16% year over year both on a reported and cc basis. This includes $812 million in short-term RPO (up 12% year over year) and $664 million in long-term RPO (up 21% year over year).BOX’s Q2 Operating DetailsSecond-quarter fiscal 2026 non-GAAP gross margin was 81%, contracting 20 basis points (bps) year over year. Sequentially, gross margin expanded 100 bps.As a percentage of revenues, non-GAAP sales and marketing, non-GAAP research and development and non-GAAP general and administrative expenses fell 100 bps sequentially.On a non-GAAP basis, the company recorded an operating margin of 28.6%, which expanded 20 bps year over year. Sequentially, operating margin expanded 400 bps.BOX’s Balance Sheet & Cash FlowAs of July 31, 2025, cash and cash equivalents were $758 million, up from $689.7 million as of April 30, 2025.Box generated $46 million in cash from operations in the fiscal second quarter, up from $127.1 million in the previous quarter. The company generated a non-GAAP free cash flow of $35.7 million in the reported quarter.In the second quarter of 2025, Box repurchased approximately 1.2 million shares for $40 million. The company had roughly $112 million under its current buyback capacity.BOX Initiates Q3 & FY26 GuidanceFor the third quarter of fiscal 2026, Box expects revenues between $298 million and $299 million, suggesting an 8% year-over-year increase. The cc growth rate is pegged at 7%. This includes an expected positive impact of approximately 80 bps due to favorable forex.The non-GAAP operating margin for the fiscal third quarter is expected to be 28%. On a non-GAAP basis, BOX expects earnings of 31-32 cents per share. For fiscal 2026, BOX expects revenues between $1.16 billion and $1.175 billion, indicating a year-over-year increase of 8%. This includes an expected positive impact of approximately 90 bps due to favorable forex.The non-GAAP operating margin for the fiscal year is expected to be 28%. Non-GAAP earnings are expected between $1.26 and $1.28 per share.How Have Estimates Been Moving Since Then?Since the earnings release, investors have witnessed a downward trend in estimates review.The consensus estimate has shifted 197.06% due to these changes.VGM ScoresAt this time, Box has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a score of D on the value side, putting it in the bottom 40% for this investment strategy.Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Box has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.Performance of an Industry PlayerBox belongs to the Zacks Internet - Software industry. Another stock from the same industry, Zoom Communications (ZM), has gained 2.5% over the past month. More than a month has passed since the company reported results for the quarter ended July 2025.Zoom reported revenues of $1.22 billion in the last reported quarter, representing a year-over-year change of +4.7%. EPS of $1.53 for the same period compares with $1.39 a year ago.For the current quarter, Zoom is expected to post earnings of $1.42 per share, indicating a change of +2.9% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.9% over the last 30 days.Zoom has a Zacks Rank #1 (Strong Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.Free Report: Profiting from the 2nd Wave of AI ExplosionThe next phase of the AI explosion is poised to create significant wealth for investors, especially those who get in early. 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(ZM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks