The Rare Winner and Many Losers of This Year’s Tech Stock Market

Quick quiz: What’s one of the only tech stocks to have risen in price so far this year? (Leave aside the companies, like Twitter, that are getting bought.) If you guessed Box, give yourself a pat on the back. You’ve been paying attention. Yes, the enterprise software stock that was out of favor—to put it mildly—during the boom times has come into its own during this brutal bear market. Box shares have risen 12.7% this year to their highest level since it went public in early 2015. Take a bow, Box co-founder and CEO Aaron Levie.

How to explain that? Box is growing steadily, if unspectacularly, at around 13% to 14% a year. It generates a ton of free cash flow, equivalent to about 25% of its revenue last year. More important, it is cheap. It’s not as cheap now as it was at the start of the year, mind you. But even today, after its appreciation, it is trading at just 4.8 times this year’s expected revenue. That’s still below the average enterprise software stock’s multiple of 7.7, according to data from Koyfin, even though most of the other stocks have lost ground this year.