What: Last month, shares of Box (NYSE:BOX) rose 12.6%, according to data provided by S&P Global Market Intelligence. Investors were likely influenced by a Pacific Crest analyst report that said that the company is gaining traction with enterprise customers and should see more third-party integration within its cloud services soon, as well as speculation on new partnerships with Alphabet's Google and Amazon.
So what: Things haven't been going so well for Box investors. The company's stock price is down 11.8% year to date, and down 47% since its IPO last year.
Even after significant revenue and customer gains in fiscal Q1 2017, an investor note (republished on Barron's) from Pacific Crest's Rob Owens appears to be the best news Box investors have heard in a while.
Owens wrote that Box's new services, Box Governance and KeySafe, are starting to grow (although slowly) with new customers, and should help Box bring in larger deals and higher average selling prices.
That's not a guarantee, of course, but there was some more good news as well. Box is also holding its BoxWorks conference next month to show off its leadership position in the cloud space. Google's executive VP of Cloud Enterprise, Diane Greene, and the CTO of Amazon, Werner Vogels, are scheduled as speakers.
Owens thinks this means that both companies may soon announce new partnerships with Box (perhaps at the conference, or soon thereafter). That could be a big win for the company as Box pushes further into the enterprise market.
Now what: Investors are waiting to see if Box's impressive customer growth (it added 5,000 new customers last quarter) will eventually bring about big gains. The company already increased revenue by 37% year over year in fiscal Q1 2017, but slower growth from billings (just 9%) caused investors to worry that the company's new plan of billing annually, instead of throughout the year, wasn't a good idea.
New partnerships with Amazon and Google would certainly be good news for Box, but investors should keep in mind the company's stock may be volatile until Box can prove that it can consistently grow customers and revenue. Increasing billings going forward should go a long way in easing investor fears as well.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Chris Neiger has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and Amazon.com. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.