Munger Mode rating: 2 out of 5 — Sell. Our own rating from the research report below, on business quality first: moat durability and management, with price separating the top three.
We have spent our lives looking for two things in a business: a moat that widens on its own, and managers we would trust with our wallets unattended. Box, Inc. gives us roughly half of each, and half-measures do not compound. Box is a competently run, genuinely sticky, niche software business that has transformed itself — under activist duress — from a cash bonfire into a cash generator. Revenue of $1.18 billion in fiscal 2026, free cash flow of roughly $360 million over the trailing twelve months, a net retention rate that has recovered to 105%, and a management team now buying back stock with real discipline. All commendable. At roughly 13–14 times enterprise value to stated free cash flow, the stock is not expensive on the numbers as printed. And yet we would not buy it, at this price or most others.
Recent filings analysed: 10-Q (2025-12-03), 10-Q (2025-08-27), 10-Q (2025-05-29), 10-K (2025-03-10).
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