Box shares have dropped 18.9% in the past year, underperforming the industry and sector. Challenging macroeconomic environment and higher expenses are affecting profitability. Gross margin remained flat at 81.2% in the trailing nine-month period, with operating expenses up 9.7% year over year. Box expects fiscal 2026 gross margin to be 81% and operating margin to be 28%.

Box benefits from a strong portfolio and partner base, including OpenAI and Amazon Web Services. The company has over 2,000 customers paying at least $100K annually. Box AI platform connects AI models and agents, preventing content sprawl and security risks. Box Automate is an agentic workflow automation solution.

Box’s latest release, Box Extract, is a data extraction solution powered by AI. It delivers accurate data and insights from various content types. Box partnered with Amazon to transform how organizations securely use AI. Box expects fourth-quarter revenues to be approximately $304 million, with non-GAAP earnings of 33 cents per share.

The company anticipates fiscal 2026 revenues of around $1.175 billion, with billings growth in the 9-10% range. Box expects fiscal 2026 non-GAAP earnings of $1.28 per share. Box carries a Zacks Rank #3 (Hold). Top-ranked stocks in the sector are Analog Devices and KLA, each with a Zacks Rank #1 (Strong Buy).

Want the latest recommendations from Zacks Investment Research? Download 7 Best Stocks for the Next 30 Days. Amazon.com, Inc., Analog Devices, Inc., KLA Corporation, and Box, Inc. offer free stock analysis reports. This article was originally published on Zacks Investment Research.

Read more at Nasdaq: Box Down 19% in a Year: Can a Strong Portfolio Help the Stock Recover?