Guidance for the rest of FY 2026
Box’s press release includes a “look‑forward” section in which the company raised its FY 2026 outlook. Over the next five quarters (Q3 FY 2026 through Q1 FY 2027) Box said it expects:
- Revenue to grow at a low‑‑double‑digit annual rate – roughly 12‑14 % versus the prior year – driven by accelerated AI‑agent adoption on its Intelligent Content Management platform.
- Revenue‑recognized ARR to exceed $1.4 bn by year‑end, implying a net‑new ARR of about $300 m for the remaining FY 2026.
- GAAP operating margin to stay in the mid‑‑teens (≈ 15 %–17 %) after the company’s expected modest SG&A and R&D uplift.
- Adjusted EPS to top‑line $0.90–$1.00, reflecting a ~10 % upside versus the consensus estimates that were previously in the $0.80‑$0.85 range.
Implications for valuation
The guidance lifts the top‑line growth trajectory into the “high‑double‑digit” territory, a step above the low‑10 % growth consensus that analysts were penciling in before the release. Assuming the market continues to price Box at a multiple of ≈ 4–5× FY 2026 forward EV/Revenue (its historic range), the upgraded revenue outlook compresses the forward‑EV/Rev multiple to ≈ 3.5–4×, translating to a 10–12 % intrinsic‑valuation upside from today’s levels. The higher operating margin and EPS targets also justify a 2–3 % uplift in the forward P/E (from roughly 22× to 24–25×), further supporting the upside potential.
Trading take‑away
* If the market hasn’t yet baked in the 12‑14 % FY 2026 revenue expansion, a short‑term pull‑back around today’s price (≈ $8.30) could present a buy‑on‑dip opportunity.
* In a risk‑parity framework, a 12‑month holding horizon with a target price of $9.25–$9.55 (≈ +10 % to +15 % from current) reflects the valuation compression and margin expansion embedded in the guidance.
* Conversely, if the stock has already rallied on the guidance, be wary of over‑paying – a modest 10 % trailing‑stop can protect against a potential reversal if later quarters show slower AI‑agent adoption than anticipated.
Overall, Box’s FY 2026 guidance is bullish enough to justify a moderate upside on the stock, provided the market still has room to price‑in the higher‑growth AI‑driven narrative.