Cloud Computing Stock Builds Base on Strength of Expected Earnings and Future Earnings
cloud computing software company Box (BOX) builds a cup base with handle, buoyed by strong growth ahead of its third-quarter earnings report next week. This recent addition to the elite INN 50 it’s Tuesday IBD 50 growth stocks to watch take.
Box provides a software platform that allows businesses to manage their content from anywhere on any device.
The BOX stock works on a cup with handle with a 29.57 point of purchaseaccording to the IBD MarketSmith Pattern Recognition. Stocks are trading well above their 50- and 200-day moving averages, although the relative force line fell this month. The stock is down 0.2% in moderate volume on Tuesday.
The Redwood City, Calif.-based cloud computing company releases its quarterly results on Nov. 30.
FactSet analysts are looking for earnings of 30 cents per share in the quarter ending Oct. 31. If achieved, the results would mark a 36% increase in profits compared to the same quarter last year. Sales are expected to grow by 12% at the same time, to reach $251 million.
Earnings from cloud computing stocks growing
The cloud computing startup produced an astonishing three-year EPS growth rate of 220% and an EPS rating of 97. Along with other attributes, this lifted the composite score at 95.
The best stocks tend to have a rating of 95 or higher when they start a big move. Keep this in mind when looking for the best stocks to buy and watch.
Analysts also like the cloud computing stock, with Credit Suisse initiating coverage this month with a buy rating and a price target of 36.
Box ranks first among its peers in the computer software and database industry group, which is ranked 152nd out of 197 industry groups tracked by IBD. Oracle (ORCL) is the highest ranked stock within the group, according to IBD Stock Check.
Software stocks have underperformed the S&P 500 this year. Potential customers are hesitant to spend more to upgrade their software systems, in the wake of high inflation and the threat of a recession.
Given these headwinds, it’s no surprise that the S&P Software & Services ETF (XSW) is down about 35% since the start of the year.
Follow Michael Molinski on Twitter @IMmolinski
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