Shares of Box (NYSE:BOX) plunged 23% on March 1 after the cloud storage and services provider posted its fourth-quarter earnings.

Let's take a look at the bright spots and black holes in the company's report to see if the recent drop presents a buying opportunity for long-term investors.

First, the good news

Box revenue rose 24% annually to $136.7 million, which matched analyst expectations. Billings were also up 28% annually to $204.6 million, while deferred revenue -- a key indicator of future demand -- jumped 33% to $320.9 million.

A smartphone, laptop, and tablet surround a cloud icon.

Image source: Getty Images.

On the bottom line, Box's non-GAAP net loss narrowed from $13.1 million to $7.7 million, or $0.06 per share, beating expectations by $0.02. Operating expenses accounted for 98% of the top line during the quarter, compared to 106% a year earlier.

That improvement enabled Box to narrow both its operating and net losses on a GAAP basis to approximately $32.5 million.

Those bottom-line improvements juiced the company's cash flows -- operating cash flow hit $48.7 million during the quarter, marking a $34 million improvement from a year earlier. Meanwhile, free cash flow grew reached $13.3 million. Cash and equivalents also grew 17% year over year to $208.1 million.

For the full year, Box's revenue rose 27% to $506.1 million. During the conference call, co-founder and CFO Dylan Smith stated that the company remained committed to "achieving a quarter of non-GAAP profitability in fiscal 2019" and hitting $1 billion in annual sales "in the coming years".

Now, the bad news

Unfortunately, that 24% sales growth during the fourth quarter marked the company's slowest pace since its IPO in 2015. The 27% growth in fiscal 2018 was also down from the prior year's 32%.

Management guidance indicates that the slowdown will continue. For the first quarter, Box expects 19% to 20% annual sales growth on the new ASC 606 accounting standard (which categorizes certain subscription-based products as deferred revenue), compared to the analyst forecast for 23% growth. By the old ASC 605 standard, Box expects 21% to 22% growth, which still falls shy of expectations.

For the full year, Box anticipates 19% to 20% revenue growth by the 606 standard, and 21% to 22% growth by the 605 standard. Both forecasts also miss the consensus estimate for 24% growth.

Why the bears are pouncing

Unless Box's top-line growth stabilizes, the bears will claim that rival enterprise platforms like Dropbox, Microsoft's OneDrive/SharePoint, and BlackBerry Workspaces will lure enterprise customers away from Box.

A group of workers access cloud-based applications.

Image source: Getty Images.

Dropbox, which recently filed for its IPO, also generates more revenue than Box and is growing at a faster rate. The private company's revenue rose 40% in 2016 and another 30% to $1.1 billion last year. In its prospectus, Dropbox warned that "the market for content collaboration platforms is competitive and rapidly changing", noting that it competes with Box on a "limited basis" in the market for large enterprise deployments.

The bears will also note that Box already has over 82,000 customers worldwide, including massive companies like General Electric, Symantec, and Broadcom. Therefore, its growth could soon peak as it runs out of new customers.

Why I'm still intrigued

I'm not eager to buy Box after its recent plunge, but I don't think it's a lost cause. Investors often mistakenly dismiss Box as roadkill for Microsoft and other big cloud platform companies, but it's consistently rated as a "best in breed" cloud-based content management system (CMS) provider.

G2 Crowd, which compares business software, recently rated Box as the market leader in the space, noting that it's easier to set up, administer, and use than its rival platforms. G2 notes that Box is cheaper than Dropbox for Business, OneDrive for Business, Sharepoint, and BlackBerry Workspaces, and that it offers a faster return on investment than Dropbox and Microsoft's platforms. Box is also adding new features to its platform -- like Box Drive, Box Relay, and Box Skills -- to generate more revenue per customer while locking them into its ecosystem.

With an enterprise value of $3.2 billion, Box remains a lucrative takeover target for any company that wants to conquer the cloud-based CMS space. Microsoft (which is both Box's rival and partner) is a commonly cited suitor, and I think a deal could still happen in the near future.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.