RBC Capital analyst Rishi Jaluria reiterated Box Inc (NYSE:BOX) with an Underperform rating and a $21 price target following Tuesday's second-quarter print.

Box reported second-quarter revenue of $270.04 million, beating the analyst consensus estimate of $269.18 million. Adjusted EPS of $0.44 beat the analyst consensus estimate of $0.40.

Box expects third-quarter revenue of $274.00 million – $276.00 million, versus the $270.97 million estimate, and adjusted EPS of $0.41 – $0.42, versus the $0.39 estimate.

The company expects fiscal year 2025 revenue of $1.086 billion – $1.090 billion, versus the $1.079 billion estimate, and adjusted EPS of $1.64 – $1.66, versus the $1.57 estimate.

Jaluria noted that second-quarter revenue was roughly in line, while billings were better but benefiting a bit from early renewals. Macro conditions remained stable, the analyst said. Fiscal 2025 revenue and billings guidance increased on a constant currency basis while margins were roughly unchanged, according to Jaluria's estimate.

Finally, the analyst said NRR improved one point, driven by higher effective pricing as AI features begin to drive higher tier upgrades.

The price target of $21 reflects an 11x Enterprise Value/Free Cash Flow multiple to Jaluria's calendar 2025 estimate of $336 million. The target multiple is a discount to the peer group, which the analyst noted as justified by the risk of commodification, competition, international slowdown, and execution track record.

Jaluria projects third-quarter revenue of $275 million and adjusted EPS of $0.41. The analyst expects fiscal 2025 revenue of $1.088 billion and adjusted EPS of $1.64.

Price Action: BOX stock traded higher by 9.65% at $31.60 at last check Wednesday.

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