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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