If You Had Bought Box (NYSE:BOX) Shares Five Years Ago You'd Have Earned 66% Returns

The main point of investing for the long term is to make money. Furthermore, you'd generally like to see the share price rise faster than the market But Box, Inc. (NYSE:BOX) has fallen short of that second goal, with a share price rise of 66% over five years, which is below the market return. However, more recent buyers should be happy with the increase of 41% over the last year.

Check out our latest analysis for Box

Box isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

For the last half decade, Box can boast revenue growth at a rate of 18% per year. Even measured against other revenue-focussed companies, that's a good result. It's nice to see shareholders have made a profit, but the gain of 11% over the period isn't that impressive compared to the overall market. That's surprising given the strong revenue growth. It could be that the stock was previously over-priced - but if you're looking for underappreciated growth stocks, these numbers indicate that there might be an opportunity here.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

It's probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. If you are thinking of buying or selling Box stock, you should check out this free report showing analyst profit forecasts.

A Different Perspective

Box shareholders gained a total return of 41% during the year. But that return falls short of the market. The silver lining is that the gain was actually better than the average annual return of 11% per year over five year. This could indicate that the company is winning over new investors, as it pursues its strategy. It's always interesting to track share price performance over the longer term. But to understand Box better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Box you should be aware of.

But note: Box may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

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This article by Simply Wall St is general in nature. 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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