To me, for a true recurring revenue SaaS company at scale, the ultimate questions are …
- What barriers are there to it continuing to recur?
- And what barriers are there to it building on top of itself?
Box is at $300,000,000+ in ARR and still growing 12% Quarter-over-Quarter:
And is valued at about 6x current ARR, and far less than that on a forward revenue model.
Is Box “undervalued” today? Who knows. The market decides what a valuation is today. The market says Box is worth $13.74 a share today, as noted above.
But is it “undervalued” looking forward?
Almost certainly.
At this growth rate (>$300m ARR, growing double digits quarter-over-quarter) … clearly, there are few barriers to this revenue recurring and growing.
And Box maintains negative net churn, and a powerful brand … so a material % of future growth is self-propogating.
So Box is gonna get to $1b+ ARR, and just get growing. At some rate.
Maybe way out there, something slows it down. Maybe. Maybe not. But probably not until then at the earliest. So …
Sounds cheap to me tomorrow at a $1.8b market cap.
But today?
The market decides.
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