Does Box’s AI Push Make Sense at Today’s Discounted Share Price?

• Wondering if Box is quietly becoming a value play while everyone chases flashier tech names? You are not alone, and this article is designed to unpack whether the current price really makes sense.
• Despite a solid 56.2% gain over five years, Box is down 0.7% over the last week, 1.9% over the last month, and 3.7% year to date, leaving it 5.7% lower than a year ago.
• Recent attention has focused on Box's ongoing push into AI powered content management and deeper integrations with major cloud platforms, which has quietly strengthened its strategic position. At the same time, expanding partnerships and product enhancements have signaled that management is still leaning into growth, even as the market rethinks risk in software names.
• On our framework, Box scores a 4/6 valuation score, meaning it screens as undervalued on four of six key checks. Next we will break down what that looks like across different valuation methods, and then circle back to an even more useful way to think about Box's true worth beyond the usual metrics.

Find out why Box's -5.7% return over the last year is lagging behind its peers.

Approach 1: Box Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model estimates what a company is worth by projecting the cash it can generate in the future and then discounting those cash flows back to today in dollar terms. For Box, the latest twelve-month free cash flow sits at about $316.8 million, and analysts see this figure climbing steadily as the business scales.

The model used here is a 2-stage Free Cash Flow to Equity approach, combining analyst forecasts with Simply Wall St extrapolations. Under this framework, Box's free cash flow is projected to rise to roughly $529.5 million by 2035, implying a multi-year growth runway rather than a one-off spike. When all these future cash flows are discounted back to the present, the estimated intrinsic value comes out at about $47.51 per share.

That compares to a current share price that implies the stock is trading at roughly a 36.5% discount to its DCF-based fair value, suggesting the market is not fully crediting Box for its cash generation potential.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Box is undervalued by 36.5%. Track this in your watchlist or portfolio, or discover 911 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Box.

Approach 2: Box Price vs Earnings

For a profitable software company like Box, the price to earnings, or PE, ratio is a useful way to gauge how much investors are willing to pay for each dollar of current profit. In general, faster growth and lower perceived risk justify a higher PE, while slower growth or higher uncertainty should pull that multiple down.

Box currently trades on a PE of about 23.2x, which is below both the broader Software industry average of roughly 32.7x and the peer group average near 67.1x. On the surface, that discount suggests investors are pricing Box more conservatively than many of its software counterparts.

Simply Wall St's Fair Ratio takes this a step further by estimating what PE multiple Box should trade on, once you factor in its earnings growth outlook, profitability, industry, market cap and stock specific risks. This tailored Fair Ratio for Box is 18.4x, implying that, relative to those fundamentals, the stock is actually priced somewhat above where you might expect based on its own profile rather than on blunt peer comparisons.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1463 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Box Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple way to connect your view of Box's story with hard numbers like future revenue, earnings, margins and a fair value estimate. A Narrative on Simply Wall St is your own investment storyline, where you spell out why Box's AI partnerships, competition, or margins might evolve in a certain way, then link that story to a forecast and a resulting fair value. Narratives live in the Community page on Simply Wall St, are easy to create and compare, and are used by millions of investors to decide whether to buy, hold, or sell by lining up Fair Value against the current share price. They also stay current, automatically refreshing as new earnings, news, or guidance data arrives. For example, one investor might build a bullish Box Narrative around rapid AI driven expansion and arrive at a fair value near the high analyst target of 45 dollars, while another, more cautious about competition and margins, could land closer to the low end near 26 dollars. Both perspectives are visible for you to benchmark your own view against.

Do you think there's more to the story for Box? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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