How Profitable is Boxed?

By Harris Dyer • Monday, January 23 12:04 • Permanent Link

Shares of Small-cap Internet Retail company Boxed were up 23.5% during today's afternoon session, as the S&P 500 posted a 1.4% change. Today's upwards movement shows that investor interest in BOXD stock is strong -- but how closely have they studied the company's margins?

While Boxed's gross margins for the last year are positive, we are concerned that the company's operating margins are in the red. Gross margins take into account only the cost of revenue, or variable costs -- meaning the cost directly associated with producing the products or providing the service offered by the company.

Operating margins, on the other hand, take into account the company's overhead as well. Overhead, also called fixed costs, includes the company's rent, salaries for personnel not included in cost of revenue, equipment and supplies, amortization, and depreciation. Operating margins tell you about how efficiently Boxed is run, and gross margins tell you how profitable its product line is.

Date Reported	Revenue ($ MM)	Cost of Revenue ($ MM)	Gross Margins (%)	YoY Growth (%)
2021-12-31	177	145	17.98	29.91
2020-12-31	187	161	13.84	143.23
2019-12-31	174	164	5.69	n/a

Boxed's gross margins have a coefficient of variability of 50.0%, with a low percentage rate being more desirable as it indicates stability. Revenues have a delta of 1.1% while cost of revenue is shrinking at a rate of -5.8%, which allows for the company's gross margins to grow at an average 86.6% per year.

Date Reported	Total Revenue ($ MM)	Operating Expenses ($ MM)	Operating Margins (%)	YoY Growth (%)
2021-12-31	177	81	-27.67	-80.5
2020-12-31	187	55	-15.33	59.4
2019-12-31	174	76	-37.76	n/a

The table above tells us that, on average, Boxed has not been profitable over the last four years, which should be a warning sign to prospective investors. To make matter worse, the company's operating margins are sinking at an average annual rate of -10.6%

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.