BOX Shares Hit Two-Year Lows on Lowered Guidance, Analyst Drubbing

At least six analysts have already issued price-target cuts on Box stock

Deputy Editor
Jun 4, 2019 at 10:07 AM
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Shares of cloud concern Box Inc (NYSE:BOX) are eyeing their fifth straight day in the red, after the firm lowered its full-year guidance below analysts' expectations. The company blamed a longer-than-usual sales cycle for its bigger deals. BOX stock fell to a new two-year low of $15.30 earlier, and was last seen down 11.3% at $15.91.

The brokerage bunch has been quick to chime in with bear notes. Already, no fewer than six analysts have issued price-target cuts on BOX, with Canaccord Genuity slashing its target all the way to $16 from $24, and downgrading the security to "hold" from a "buy" rating. In fact, Canaccord admitted that it has "defended this company's intermittent execution for too long," and said it would rather break its own "never change a rating immediately after a print rule" than defend the shares.

The equity is still ripe for more downgrades, however. Prior to today, Box had 10 "buy" or better ratings, compared to four "holds" and not a single "sell." Plus, its consensus 12-month price target of $20.68 represents a premium of roughly 30% to current levels. 

Not only is BOX set for its lowest close since January 2017, it's also eyeing its biggest one-day drop since its last post-earnings bear gap in February. Plus, the equity is back south of its year-to-date breakeven level. 

While BOX is on the short-sale restricted list today, short sellers could start piling on again. During the most recent reporting period, short interest fell 6.5%, and now represents a mere 3.8% of the stock's available float.

Options traders, on the other hand, are likely cheering Box's dramatic plummet. In the past 10 days, BOX has racked up a put/call volume ratio of 1.06 on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits higher than 94% of readings from the past year, which hints at a much healthier-than-usual appetite for puts over calls of late. 

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