Announcement • May 05
Boxed, Inc. Announces Departure of Chieh Huang, Chief Executive Officer Effective May 1, 2023 Boxed, Inc. announced the departure of Chieh Huang as Chief Executive Officer of the company effective as of May 1, 2023. Mr. Huang continues to serve as a member of the Company’s board of directors, and no new compensatory agreements were entered into with Mr. Huang in connection with such continuing service. Announcement • Feb 07
Tsukasa Ojima, a Class II Director, Notifies Boxed, Inc. of His Resignation from the Board of Directors On February 1, 2023, Tsukasa Ojima, a Class II director, notified Boxed, Inc. of his resignation from the Company’s Board of Directors (the “Board”), effective immediately. Mr. Ojima informed the Company that his decision is based on his need to focus on his full-time role as Executive Officer, Business Development and Branding at AEON Co. Ltd, (“Aeon”), an investor and partner of the Company, and in consideration of any potential conflicts of interest which could arise between the Company and Aeon. Mr. Ojima’s resignation was not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices. The Company and the Board extend their appreciation to Mr. Ojima for his contributions and service on the Board. Seeking Alpha • Nov 16
Boxed, Inc. Stock: Financial Challenges Not Worth Recycling Summary
BOXD reported its Q3 earnings with a decline in revenue and widening loss.
A shift towards B2B customers has helped to improve some key performance indicators, although financial fundamentals remain poor.
An outlook for recurring losses and an ongoing cash burn will likely keep shares under pressure.
Boxed, Inc. (BOXD) is approaching its 10th anniversary as an online retailer specializing in household staples and food pantry items. While sales climbed over the last several years amid the e-commerce boom, the company was not been able to translate that momentum into a financially viable model. Indeed, revenues are down this year with a widening loss leaving shares off a disastrous -95% year-to-date in 2022.
The company just reported its latest quarterly result highlighted by some deep financial challenges likely to continue leaving some serious doubt about the long-term sustainability of the business. The only thing we're seeing inside BOXD is the number of red flags that should serve as a warning for investors to stay away.
BOXD Earnings Recap
BOXD Q3 revenue of $41.7 million declined by 15% year-over-year. Within that figure, retail sales increased by 1% from Q3 2021 although the bigger impact was the limited contribution of the software & services segment related to its "Spresso" e-commerce management platform that is licensed to other companies. Management explains that a large $10 million deal in 2021 left a difficult comparison with an understanding that the sales trends feature some quarterly variability. On this point, the expectation is that a new customer engagement will add to some top-line boost going forward.
The company messaging has been to focus on some strong points. The average order value on the site reached a record $150, from $123 in Q3 2021. Similarly, the retail net revenue per active customer increased to $336 from $243. Boxed is also finding some success in serving more business-to-business (B2B) customers, where gross merchandise value climbed by 37% y/y in Q3.
On the other hand, the total number of active customers declined by 21% to 124k compared to 157 in the period last year. The readout is that Boxed is serving fewer customers, but the most loyal shoppers are spending a bit more on regular purchases.
source: company IR
The bigger question is if any improvement from here or the marginally positive silver linings will be enough to fill the hole of the large recurring loss. The challenge is evident looking at the Q3 operating loss that reached -$21.6 million compared to -$5.4 million in Q3 2021. A nearly 86% increase in SG&A following the company's December 2021 SPAC merger added significant expenses. The adjusted EBITDA loss of -$16.3 million also widened from -$3.0 million in the period last year.
source: company IR
The company ended the quarter with $39.4 million in cash including a portion of "restricted cash" against $44 million in long-term debt. There is also a separate $81 million in liabilities related to PIPE convertible notes. All this is in the context of a business that burned about $10.4 million in cash in Q3, meaning liquidity will need to be addressed over the next few quarters likely through another capital raise.
In terms of guidance, management expects full-year revenue in the range of $165 million to $180 million. This implies approximately flat Q4 sales compared to Q3. The expectation is that the 2022 adjusted EBITDA loss ends in the range of -$65 million to -$80 million, compared to -$61 million year to date.
BOXD Stock Price Forecast
We're bearish on BOXD as we just don't see the company picking up the growth momentum necessary to jumpstart a real turnaround. The skepticism we have is whether Boxed offers a compelling shopping proposition to potential customers that are capable of competing with the segment leaders like Amazon.com (AMZN) and Walmart Inc. (WMT) that can offer more value across their ecosystem of services. There's little reason to see why the ongoing decline of active customers at Boxed will reverse or even stabilize.
Based on our estimate and the current gross margin of 12%, retail revenues would need to more than double from the current quarterly level to approach a breakeven adjusted EBITDA. Again, this is a difficult market segment where even Amazon struggles with e-commerce profitability amid current macro headwinds. Board Change • Nov 16
High number of new and inexperienced directors There are 8 new directors who have joined the board in the last 3 years. The company's board is composed of: 8 new directors. No experienced directors. No highly experienced directors. Independent Director Eileen Serra is the most experienced director on the board, commencing their role in 2020. The following issues are considered to be risks according to the Simply Wall St Risk Model: Lack of board continuity. Lack of experienced directors. Reported Earnings • Nov 11
Third quarter 2022 earnings: Revenues exceed analysts expectations while EPS lags behind Third quarter 2022 results: US$0.37 loss per share. Revenue: US$41.7m (down 15% from 3Q 2021). Net loss: US$26.4m (loss widened 405% from 3Q 2021). Revenue exceeded analyst estimates by 5.9%. Earnings per share (EPS) missed analyst estimates by 9.9%. Revenue is forecast to grow 20% p.a. on average during the next 3 years, compared to a 12% growth forecast for the Online Retail industry in the US. Announcement • Nov 10
Boxed, Inc. Provides Earnings Guidance for Fiscal Year 2022 Boxed, Inc. provided earnings guidance for Fiscal Year 2022. For the year 2022, the company expected total net revenue of $165 to $180 million. Announcement • Oct 27
Boxed, Inc. to Report Q3, 2022 Results on Nov 09, 2022 Boxed, Inc. announced that they will report Q3, 2022 results on Nov 09, 2022 Announcement • Sep 23
Boxed, Inc. Partners with Snowflake to Provide Spresso Saas Capabilities to Joint Customers Boxed, Inc. announced that its Spresso SaaS platform is now Powered by Snowflake. Powered by Snowflake is a Snowflake Partner Network program, designed to accelerate the ability of companies and application developers to deliver differentiated applications by supporting them across all stages of the application journey in Snowflake’s Data Cloud. Spresso solutions deliver actionable insights to help customers scale their businesses effectively by supporting efficient growth and cost reduction. The platform’s modularized analytics and machine learning solutions target specific opportunities in the retail ecosystem, allowing merchants to better forecast customer value, predict churn, optimize pricing for profitability and conversion, and drive efficiencies in packing and shipping. Through its Spresso platform, Boxed has been a longtime customer of Snowflake and a member of Snowflake Partner Connect, and now, the Snowflake Partner Network. Spresso tools and modules were built using the Snowflake Native Application Framework, currently in private preview, which enables application developers to build apps using Snowflake core functionalities, globally distribute them on Snowflake Marketplace, and deploy them within a consumer’s Snowflake account. Spresso will soon be available to Snowflake’s Data Cloud Ecosystem, consisting of more than 6,300 customers, and leverage Snowflake enablers such as Snowpark, Snowsight, and other valued marketplace partners. Major Estimate Revision • Aug 16
Consensus revenue estimates fall by 24% The consensus outlook for revenues in 2022 has deteriorated. 2022 revenue forecast decreased from US$226.2m to US$170.8m. Forecast losses increased from -US$1.63 to -US$1.66 per share. Online Retail industry in the US expected to see average net income growth of 5.9% next year. Consensus price target down from US$10.33 to US$4.33. Share price fell 18% to US$1.60 over the past week. Reported Earnings • Aug 11
Second quarter 2022 earnings: EPS and revenues miss analyst expectations Second quarter 2022 results: US$0.47 loss per share. Revenue: US$43.7m (up 3.1% from 2Q 2021). Net loss: US$31.8m (loss widened 277% from 2Q 2021). Revenue missed analyst estimates by 13%. Earnings per share (EPS) also missed analyst estimates by 25%. Over the next year, revenue is forecast to grow 30%, compared to a 16% growth forecast for the industry in the US. Seeking Alpha • Aug 10
Boxed: Hold The Stock For Long-Term Growth It has recently signed a Memorandum of Understanding with AEON's subsidiary AEON Vietnam Company Limited to expand the geographical reach.
It has also won the first US-based company contract of Jeffers Pet which is a key milestone as it opens the door to the new geographical market and potential.
It is trading below its 50-day and 100-day weighted moving average. This reflects that the company has negative technical indicators due to the severe downside since June 2022.
Investment Thesis
Boxed (BOXD) is an e-commerce retailer and provider of e-commerce platform services. It has recently expanded its Spresso business in the USA and Vietnam market, increasing its potential customer base. I believe these expansions can act as a growth factor for the company in the coming years.
About Boxed
The company is an e-commerce retailer and provides e-commerce services. The company offers bulk pantry consumables to corporates and household consumers. It also offers e-commerce platform services to enterprise-level customers through the latest Software & Services business which gives access to its end-to-end technology. The company reports its revenue under two segments. The first segment is Retail, and the second segment is Software & Services. The company's retail business generates 89% of the total revenue, and Software & Services, which is newly established, contributes 11% of the total net sales. According to a recent strategic update, the retail segment of the company has achieved growth of 11.2%, and the Gross Merchandise Value (GMV) has grown by 19.4% YoY in the second quarter of FY2022. GMV has shown strong growth in the last three consecutive quarters. Retail active customers have reached 167 million, which is 9% YoY growth. The company has changed its "MaxDelivery" brand, which it acquired in 2021 as "Boxed Market" to expand into new markets. To expand additional Boxed Market micro-fulfillment centers in Westchester and Brooklyn, New York, Boxed recently acquired new leases. The centers are anticipated to launch fully in the fourth quarter of this year. These expansions can significantly affect the financials in the long term.
Second Quarter Performance (Investor Presentation)
Software & Services business has branded as "Spresso" to create a separate brand value in the market. The company has a strong growth vision for this segment as it has expanded business in the USA and Vietnam. I believe the Software & Services segment has huge growth potential in the coming years as the company has strategic plans to capitalize on the recent commercial momentum by building its broader Boxed ecosystem to offer a wide range of services. I think the recent AEON partnership and the entry into the USA can significantly contribute to the long-term target of positive EBITDA by FY2024 and the company's ecosystem.
Expansion Into New Geographies
The company has recently signed a Memorandum of Understanding (MoU) with AEON's subsidiary AEON Vietnam Company Limited to expand the geographical reach of the end-to-end software and services platform in Vietnam. The company has previously partnered with AEON to expand Boxed's proprietary e-commerce technology in the Malaysian market, which was very successful. I think the previous successful collaboration gives certainty about the synergy of both entities. The company has also announced that after the Vietnam market, it will continue the expansion in Southeast Asia with AEON. I believe this global expansion of the company can positively affect the financials of the company in the long term. It has also won the first US-based company contract of Jeffers Pet which is a key milestone as it opens the door to the new geographical market and potential customer base. I think the company's expansion of the Spresso platform in the USA and Vietnam might act as a primary growth catalyst in the coming period as both expansions have increased the global reach.
What Is The Main Risk Faced By BOXD?
Inflation
Industry-wide inflation that we are currently facing has criticality affected the company's profitability. BOXD is susceptible to the increasing cost of goods as it directly affects the customer demand for the company. BOXD operates in a highly competitive market, and to maintain sales and retain customers, the company has to sell goods at an attractive price. To maintain the selling price of the products, the company has to take a hit on the profit margins. The inflation is likely to continue through FY23, which is not a positive sign for the company.
Technical Analysis & Fundamental Valuation
Technical Analysis of Boxed (Investing.com)
BOXD is trading below its 50-day, and 100-day weighted moving average (WMA). This reflects that the company has negative technical indicators due to the severe downside since June 2022. The stock price is facing resistance at the 50-day WMA level, and unless the stock crosses the 50-day WMA, it's difficult to see momentum in the stock. The RSI indicator, on the other hand, suggests that the stock is consolidating in the 30-50 RSI band range. This range is generally considered a buy zone; however, there is no significant divergence as per the RSI chart to suggest any buying momentum in the stock. As per my analysis, both RSI and WMA indicators don't reflect any buying momentum in the stock, and I would recommend that investors hold the stock for now. Announcement • Aug 10
Boxed, Inc. Provides Revenue Guidance for the Fiscal Year 2022 Boxed, Inc. provided revenue guidance for the Fiscal Year 2022. For the period, the company expects Total Net Revenue of $165 million to $180 million. Board Change • Aug 02
High number of new directors There are 5 new directors who have joined the board in the last 3 years. Director Tsukasa Ojima was the last director to join the board, commencing their role in 2022. The company’s lack of board continuity is considered a risk according to the Simply Wall St Risk Model. Announcement • Jul 22
Boxed, Inc. to Report Q2, 2022 Results on Aug 09, 2022 Boxed, Inc. announced that they will report Q2, 2022 results After-Market on Aug 09, 2022 Announcement • Jul 16
Boxed, Inc. Appoints Tsukasa Ojima to its Board of Directors Boxed, Inc. announced the addition of Tsukasa Ojima, Executive Officer, Business Development and Branding at AEON Co. Ltd. (“AEON”), to its Board of Directors, effective immediately. Over the last 30 years, Mr. Ojima has established himself as a top business executive in Asia, through a variety of management positions in commercial and investment banking with leading financial institutions, including Sanwa Bank (now MUFG Bank Ltd.), Lehman Brothers Japan, Inc. and Nomura Securities. Before joining AEON, Mr. Ojima served as Director, Vice President, and Executive Officer of Wealth Management Inc. He also serves as a Director of OOTOYA Holdings Co. Ltd. Mr. Ojima fills a seat vacated when Board member Yuki Habu accepted a new role as a member of the Board of Directors at AEON, where she serves as a senior executive. Given the increased time commitment required with this appointment, she decided to step off the Board at Boxed. Price Target Changed • Jul 13
Price target decreased to US$10.33 Down from US$12.00, the current price target is an average from 3 analysts. New target price is 447% above last closing price of US$1.89. Stock is down 81% over the past year. The company is forecast to post a net loss per share of US$1.58 next year compared to a net loss per share of US$5.14 last year. Recent Insider Transactions • Jun 16
Independent Director recently bought US$272k worth of stock On the 14th of June, Andrew Pearson bought around 150k shares on-market at roughly US$1.82 per share. This was the largest purchase by an insider in the last 3 months. This was the only on-market transaction from insiders over the last 12 months. Price Target Changed • May 23
Price target decreased to US$11.50 Down from US$12.50, the current price target is an average from 3 analysts. New target price is 23% above last closing price of US$9.35. Stock is down 3.1% over the past year. The company is forecast to post a net loss per share of US$1.58 next year compared to a net loss per share of US$5.14 last year. Announcement • May 12
Boxed, Inc. Provides Earnings Guidance for the Fiscal Year 2022 Boxed, Inc. provided earnings guidance for the fiscal year 2022. The company maintaining its previously provided guidance for Fiscal Year 2022, and providing additional disclosure for its Software & Services Segment: Total Net Revenue of $220 to $245 million, reflecting a range of 24% and 38% YoY growth. Total Software & Services Revenue of $15 to $23 million. Announcement • May 08
Boxed, Inc. Announces Executive Appointments Boxed, Inc. announced the addition of three C-Suite executives, to the roles of General Counsel, Chief People Officer and Chief Revenue Officer. Anna Meyer has joined the company as Chief Revenue Officer. A results-driven revenue executive, Ms. Meyer brings two decades worth of experience building high performing teams and driving profitable revenue streams in the retail technology sector. At Boxed, she will be tasked with acquiring new clients for the Spresso software business. Most recently, Ms. Meyer led the sales organization at Sezzle, a fast-growing fintech. In her three years at Sezzle, she built a team that grew the retail customer base by over 670% while scaling to ensure the customer value proposition remained high and churn remained at an all time low. Prior to Sezzle, Ms. Meyer worked at SPS Commerce for 14 years, building out their presence in Asia Pacific. Additionally, Jung Choi has joined the company as General Counsel & Secretary. She brings 15 years of diverse legal experience at large public companies and in private practice. Ms. Choi will lead all legal and compliance matters and serve as a strategic advisor to management and the Board of Directors. Most recently, Ms. Choi served as Vice President, Assistant General Counsel & Assistant Secretary at Stanley Black & Decker, a diversified global industrial provider, where she was responsible for public company reporting, securities regulation, corporate governance and its ESG shareholder engagement strategy. She also oversaw the Global Ethics and Compliance department and the Global Privacy Office. Prior to Stanley, Ms. Choi worked at Bristol-Myers Squibb, a global biopharmaceutical company, and Davis Polk & Wardwell, a leading international law firm. Veracelle Vega has also joined the Company as the new Chief People Officer. She brings 20 years of experience delivering and building high performing companies. Ms. Vega’s responsibilities include leading and developing all People strategies including organizational effectiveness, compensation and total rewards, talent management, learning + development, employee engagement, talent acquisition and creating a world class work culture with a focus on DEIB (diversity, equity, inclusion and belonging). Most recently, Ms. Vega served as the Chief People Officer at Resident, the direct-to-consumer mattress company. Reported Earnings • May 04
Full year 2021 earnings: Revenues exceed analysts expectations while EPS lags behind Full year 2021 results: US$5.14 loss per share (down from US$3.80 loss in FY 2020). Revenue: US$177.3m (down 5.3% from FY 2020). Net loss: US$67.2m (loss widened 89% from FY 2020). Revenue exceeded analyst estimates by 1.8%. Earnings per share (EPS) missed analyst estimates by 158%. Over the next year, revenue is forecast to grow 26%, compared to a 16% growth forecast for the retail industry in the US. Board Change • Apr 27
High number of new directors There are 5 new directors who have joined the board in the last 3 years. Independent Chairman of the Board Gary Matthews was the last director to join the board, commencing their role in 2021. The company’s lack of board continuity is considered a risk according to the Simply Wall St Risk Model. Announcement • Apr 20
Boxed, Inc. to Report Q1, 2022 Results on May 10, 2022 Boxed, Inc. announced that they will report Q1, 2022 results After-Market on May 10, 2022 Reported Earnings • Mar 17
Full year 2021 earnings: EPS and revenues exceed analyst expectations Full year 2021 results: US$5.30 loss per share (down from US$3.61 loss in FY 2020). Revenue: US$177.3m (down 5.3% from FY 2020). Net loss: US$69.2m (loss widened 95% from FY 2020). Revenue exceeded analyst estimates by 1.8%. Earnings per share (EPS) also surpassed analyst estimates by 158%. Over the next year, revenue is forecast to grow 28%, compared to a 17% growth forecast for the retail industry in the US. Board Change • Mar 04
High number of new directors There are 5 new directors who have joined the board in the last 3 years. Independent Chairman of the Board Gary Matthews was the last director to join the board, commencing their role in 2021. The company’s lack of board continuity is considered a risk according to the Simply Wall St Risk Model. Announcement • Feb 24
Boxed, Inc. to Report Q4, 2021 Results on Mar 15, 2022 Boxed, Inc. announced that they will report Q4, 2021 results After-Market on Mar 15, 2022 Reported Earnings • Dec 18
Third quarter 2021 earnings: Revenues and EPS in line with analyst expectations Third quarter 2021 results: US$0.52 loss per share. Revenue: US$49.0m (flat on 3Q 2020). Net loss: US$5.22m (flat on 3Q 2020). Revenue was in line with analyst estimates. Over the next year, revenue is forecast to grow 27%, compared to a 5.5% growth forecast for the industry in the US. Board Change • Dec 11
No independent directors Following the recent departure of a director, there are no independent directors on the board. The company's board is composed of: No independent directors. 3 non-independent directors. Director Jeff Richards was the last director to join the board, commencing their role in 2015. The company's lack of independent directors is a risk according to the Simply Wall St Risk Model. 