Box has gotten torched over the last six months - since October 2025, its stock price has dropped 34.5% to $21.46 per share. This might have investors contemplating their next move.

Is there a buying opportunity in Box, or does it present a risk to your portfolio? Dive into our full research report to see our analyst team’s opinion, it’s free.

Why Is Box Not Exciting?

Even with the cheaper entry price, we're cautious about Box. Here are three reasons we avoid BOX and a stock we'd rather own.

1. Weak Billings Point to Soft Demand

Billings is a non-GAAP metric that is often called “cash revenue” because it shows how much money the company has collected from customers in a certain period. This is different from revenue, which must be recognized in pieces over the length of a contract.

Box’s billings came in at $419.8 million in Q4, and over the last four quarters, its year-on-year growth averaged 11.9%. This performance was underwhelming and suggests that increasing competition is causing challenges in acquiring/retaining customers.

2. Projected Revenue Growth Is Slim

Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.

Over the next 12 months, sell-side analysts expect Box’s revenue to rise by 8.4%. Although this projection implies its newer products and services will catalyze better top-line performance, it is still below the sector average.

3. Operating Margin in Limbo

While many software businesses point investors to their adjusted profits, which exclude stock-based compensation (SBC), we prefer GAAP operating margin because SBC is a legitimate expense used to attract and retain talent. This is one of the best measures of profitability because it shows how much money a company takes home after developing, marketing, and selling its products.

Analyzing the trend in its profitability, Box’s operating margin might fluctuate slightly but has generally stayed the same over the last two years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. Its operating margin for the trailing 12 months was 7.1%.

Final Judgment

Box isn’t a terrible business, but it doesn’t pass our quality test. Following the recent decline, the stock trades at 2.6× forward price-to-sales (or $21.46 per share). This valuation multiple is fair, but we don’t have much faith in the company. We're fairly confident there are better investments elsewhere. We’d suggest looking at an all-weather company that owns household favorite Taco Bell.

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