Box Stock Rises After Analyst Predicts 40% Upside Potential: Retail Sees Catch-Up Rally
By Stocktwits Inc | First Published Dec 18, 2024, 4:59 PM ISTDA Davidson analyst Lucky Schreiner expects to see an upgrade cycle from current customers to more premium tiers of the Box platform leading to both higher growth and margins.
Box. Inc. ($BOX) shares rose modestly in Wednesday’s premarket session following a positive analyst action.
DA Davidson analyst Lucky Schreiner initiated coverage of Box with a ‘Buy’ rating and $45 price target. The price target points to upside potential of over 40% from current levels.
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The analyst said the enterprise content management solutions provider is in the early stages of positive inflection to growth after the recent expansion to its platform.
“We expect to see an upgrade cycle from current customers to more premium tiers of the Box platform leading to both higher growth and margins,” Schreiner said
The analyst said Box is aligned with its customer base to engage them on a wider variety of use cases with its automation and artificial intelligence (AI) agent functionality. The company is poised to capture new areas of spending, potentially leading to sustained improvements in its attach rate of Suites, he added.
Schreiner sees Box’s AI capabilities as a compelling reason to shift away from legacy providers and toward cloud-based solutions like Box.
According to DA Davidson, Box’s valuation is attractive, given its current growth and profit metrics provide a strong base that limits downside risk.
In premarket trading, as of 6:18 a.m. ET, Box shares climbed 1.43% to $32.53. The stock has gained more than 25% this year.
The sell-side has become increasingly optimistic about Box in the near term. Following the company’s third-quarter results released in early December, Morgan Stanley increased the price target for the stock from $33 to $36. Last week, BofA Securities initiated coverage of Box with a ‘Buy’ rating and a $40 price target. UBS also hiked the price target for the stock from $34 to $42.
On Stocktwits, a user said they are bullish on Box stock, citing the huge underperformance of the small-cap tech space for the past 18 months amidst an epic bull market.
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