Boxlight Corp: Why This Education Tech Stock Can Triple

Boxl stockBoxlight Stock Is on Sale, But Maybe Not for Long

We all know the impact of the global COVID-19 pandemic on businesses and everyday life.

One impact was that many kids were forced to move from in-person to online instruction. But even when they go back to classrooms, there will be a huge demand for innovative ways to deliver lessons, whether it’s in the classroom or virtually.

A few years ago, the stock market was excited about the promise shown by Boxlight Corp (NASDAQ:BOXL) in the education space. The company’s fully integrated software and hardware platform allow educators to provide a better learning environment for both physical and remote classrooms.

Boxlight seemed to be in the right space, given the massive demand for delivering education, especially in remote areas. But things didn’t work out as planned, as Boxlight Corp struggled to deliver profits and free cash flow (FCF), despite its growing revenues.

Advertisement

BOXL stock surged from $0.60 in May 2020 to a 52-week high of $4.65 in July 2020 but failed to hold.

Boxlight stock has retrenched by more than 50% from its range high, and it’s down by a lot from its record $17.40 in May 2018. Therefore, I see the stock as a good risk/reward opportunity right now.

Chart courtesy of StockCharts.com

My Fundamental Bull Case for BOXL Stock

Boxlight Corp’s five-year revenue picture shows double-digit growth in three of the last four years, including a record $54.8 million in 2020. The compound annual growth rate (CAGR) was an impressive 28% during this time frame.

Fiscal Year Revenues (Millions) Growth
2016 $20.4 N/A
2017 $25.7 26.4%
2018 $37.8 47.0%
2019 $33.0 -12.7%
2020 $54.8 66.2%

(Source: “Boxlight Corp. Cl A,” MarketWatch, last accessed April 16, 2021.)

Looking ahead, the revenue growth picture looks bullish for Boxlight. Analysts estimate that its revenues will surge by 158.9% to $142.1 million in 2021, followed by growth of 12.3% to $159.5 million in 2022. (Source: “Boxlight Corporation (BOXL),” Yahoo! Finance, last accessed April 16, 2021.)

If the company can deliver anything close to these expectations, I would expect a much higher share price for BOXL stock.

While the revenue side is encouraging, Boxlight needs to work on delivering earnings before interest, taxes, depreciation, and amortization (EBITDA) income and profitability.

Fiscal Year EBITDA Growth
2016 -$932,860 N/A
2017 -$6.5 Million -596.2%
2018 -6.1 Million 6.0%
2019 -$7.2 Million -17.1%
2020 -$9.3 Million -29.2%

(Source: MarketWatch, op. cit.)

A look at the profitability shows Boxlight Corp consistently losing money, but there are positive signs.

The company’s generally accepted accounting principles (GAAP) diluted earnings-per-share (EPS) loss of $0.39 in 2020 was its best result in five years.

Fiscal Year GAAP Diluted EPS Growth
2016 -$0.47 N/A
2017 -$1.20 -153.9%
2018 -$0.72 39.7%
2019 -$0.88 -21.6%
2020 -$0.39 55.6%

(Source: MarketWatch, op. cit.)

Boxlight Corp’s losses are expected to narrow to $0.16 per diluted share in 2021, followed by a loss of $0.09 per diluted share in 2022. (Source: Yahoo! Finance, op. cit.)

The company’s FCF was negative in the past four years, but hopefully we’ll see positive FCF over the next two years as revenues grow.

Fiscal Year FCF (Millions) Growth
2016 $2.4 N/A
2017 -$1.3 -156.7%
2018 -$3.8 -181.0%
2019 -$4.3 -13.0%
2020 -$4.9 -15.5%

(Source: MarketWatch, op. cit.)

Analyst Take

While the market appears somewhat gun-shy regarding Boxlight stock, company insiders have been jumping in. I’m not sure who you trust more, but the fact that insiders added 1,157,662 shares of BOXL stock over the past six months is a bullish sign. (Source: Yahoo! Finance, op. cit.)

Moreover, the shares look cheap as Boxlight Corp trades at only 0.84 times its consensus 2021 revenue estimate and 0.75 times its consensus 2022 revenue estimate.

This should provide some downside cushioning for those interested in Boxlight stock.