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Box (BOX): analysis traps
Where its figures could mislead a reader, and what to check before taking them at face value · Data: Q2 FY27, to Jul 31, 2026, filed Aug 26, 2026; rules v1.1
Box (BOX): 0 rules of 10 triggered on the filings to Jul 31, 2026. 1 to review; 1 with insufficient data; 2 not applicable. Each is a question to verify, with the normal explanation that would produce the same figures.
Check these first
A precise DCF value = the true value To review · confidence high
The DCF's point value is 17.48 a share (price 43.45); 71% of it is the terminal value, a number about years no one has seen. Moving operating margin by ±3 pts alone takes it from 12.17 to 22.78; across every method the research ran the range is 2 to 74. The value is a range; the decimals are not information.
Innocent reading: A stable, mature business with a narrow range of outcomes, where the point value is a fair summary.
Every rule
A01 FCF growth = the business improved Not triggered confidence high
Free cash flow rose $21M to $350M; working capital and lower capex explain 22% of it, so most of the gain is in operating cash flow itself.
The figures and how they are read
| Fiscal year before | FY25 |
| Fiscal year | FY26 |
| Operating cash flow, year before | $332M |
| Operating cash flow | $356M |
| Capex, year before | $3M |
| Capex | $6M |
| Free cash flow, year before | $330M |
| Free cash flow | $350M |
| Change in FCF | $21M |
| Change in capex | $4M |
| Working capital: change in its cash contribution | $5M |
| Of which: capex cut | 0.00 |
| Of which: working capital released | $5M |
| Share of the increase that need not repeat | +21.9% |
| Operating cash flow before working capital: change | 19665000.00 |
FCF = operating cash flow − cash capex; ΔFCF = ΔOCF − ΔCapEx; the working-capital part is the change in the cash-bridge items (receivables, inventory, payables, accruals), with the sign of the cash flow statement
Source: FY26 (cash flow statement, fiscal year) · FY25 (cash flow statement, fiscal year before)
A07 Stock compensation added back = no economic cost Not triggered confidence high
Stock compensation is 19.9% of revenue, but buybacks of $290M covered it (1.2×) and the diluted share count was about flat: the dilution has been paid for in cash.
The figures and how they are read
| Fiscal year | FY26 |
| Stock compensation | $234M |
| Revenue | $1.2B |
| SBC / revenue | +19.9% |
| Buybacks | $290M |
| Buybacks / SBC | 1.2 |
| Diluted shares, year before | 148.6M shares |
| Diluted shares | 149.2M shares |
| Diluted shares: change | +0.3% |
SBC / revenue from the cash flow statement's add-back; the diluted weighted share count year over year; buybacks from the financing section
Source: FY26 (stock compensation, buybacks and the diluted share count, fiscal year)
B02 Receivables growing = future cash is certain Not triggered confidence medium
Receivables grew 13% against revenue 9% in Q2 FY27; DSO 58 against a median of 75: collections are keeping pace with sales.
The figures and how they are read
| Quarter | Q2 FY27 |
| Revenue, year over year | +9.2% |
| Receivables, year over year | +12.7% |
| Quarter before | Q1 FY27 |
| Revenue y/y, quarter before | +10.7% |
| Receivables y/y, quarter before | +8.0% |
| Days sales outstanding | 58.2 |
| DSO, median of eight quarters | 75.3 |
| Receivables | $214M |
| Revenue | $321M |
receivables and revenue against the same quarter a year earlier; DSO = receivables / quarterly revenue × days, against the median of the eight quarters before
Source: Q2 FY27 (receivables and revenue) · Q2 FY26 (the same quarter a year earlier)
B08 Adjusted profit = economic profit Insufficient data
no reconciliation table read from the releases yet and fewer than three quarters with both an adjusted and a GAAP EPS
C02 Low net debt = no refinancing risk Not triggered confidence medium
Nothing comes due within a year; net debt is $8M.
The figures and how they are read
| Cash and investments | $444M |
| Debt | $452M |
| Net debt | $8M |
| Due within a year | 0 |
| Read from | the current portion of debt on the balance sheet |
| Free cash flow, twelve months | $389M |
| Cash plus free cash flow | $833M |
| Coverage of what is due | — |
| Due in the second year | — |
| Balance sheet date | 2026-07-31 |
due within a year from the maturity table (else the current portion of debt), against cash and investments plus free cash flow over the last twelve months (zero if negative); no credit lines assumed
Source: 2026-07-31 (debt maturities, cash and investments)
D03 EPS growth = profit growth Not triggered confidence high
EPS rose 55% and net income rose 43% in Q2 FY27; the share count fell 7.5%: EPS growth follows profit growth.
The figures and how they are read
| Quarter | Q2 FY27 |
| Quarter before | Q2 FY26 |
| EPS, year before | $0.09 |
| EPS | $0.14 |
| Net income, year before | $13M |
| Net income | $19M |
| Diluted shares, year before | 151.1M shares |
| Diluted shares | 139.7M shares |
| EPS growth | +55.1% |
| Net income growth | +43.0% |
| Diluted shares: change | -7.5% |
| eps from profit | $0.04 |
| eps from share count | $0.01 |
EPS and net income against the same quarter a year earlier; the EPS bridge attributes the change to profit first, then to the share count (the order is fixed and disclosed)
Source: Q2 FY27 (net income, diluted shares, EPS) · Q2 FY26 (the same quarter a year earlier)
E02 Low P/E at a cyclical peak = undervalued Not triggered confidence medium
Net income of $131M is not at a cyclical high against the last eight years (median $27M, best $245M): the P/E of 46.5× is on a normal year.
The figures and how they are read
| market value | $6.1B |
| net income ttm | $131M |
| pe ttm | 46.50 |
| net income median fy | $27M |
| pe mid cycle | 226.70 |
| net income peak fy | $245M |
| years | FY19 / -135.0; FY20 / -144.0; FY21 / -43.0; FY22 / -41.0; FY23 / 27.0; FY24 / 129.0; FY25 / 245.0; FY26 / 115.0 |
| down years in window | 2 |
P/E on the trailing twelve months' net income against the P/E on the median net income of the last eight fiscal years (a mid-cycle stand-in); 'at a peak' = this year's profit at or above 90% of the best year and at least 1.3× the median
Source: Q2 FY27 (net income, trailing twelve months)
E07 A precise DCF value = the true value To review confidence high
The DCF's point value is 17.48 a share (price 43.45); 71% of it is the terminal value, a number about years no one has seen. Moving operating margin by ±3 pts alone takes it from 12.17 to 22.78; across every method the research ran the range is 2 to 74. The value is a range; the decimals are not information.
The figures and how they are read
| dcf value | 17.48 |
| price | 43.45 |
| terminal value share | +71.4% |
| swing by input | Operating margin / ±3 pts / 12.17 / 22.78; Revenue growth (each year) / ±5 pts / 14.33 / 21.23; WACC / ±1 pt / 14.9 / 21.2; Terminal growth / ±0.5 pt / 16.81 / 18.27 |
| range all methods | 2.21; 73.92 |
the DCF's point value against the share of it that is the terminal value and the value at each input moved by one step (growth ±5 pts, WACC ±1 pt, margin ±3 pts …); the range across every method the research ran
Source: 2026-11-08 (valuation research)
What would explain it innocently
- A stable, mature business with a narrow range of outcomes, where the point value is a fair summary
- The inputs that matter most are themselves well known (a regulated return, a long contract)
What to look for in the filing
- Which input you believe differs from the research's and why
- What the price implies for growth (the reverse DCF on the fair-value page)
What would show the trap does not apply
- The DCF's value is robust to the terminal growth and discount rate (the range's low end is still above the price)
- The company's cash flows over the next three years track the DCF's early years
Look again: next filing.
J06 A bank's low P/E and high profit = safe Not applicable
not a bank
J08 A REIT's low net income = the dividend is unsafe Not applicable
not a REIT
What the statuses mean
Triggered: the filings show the pattern; read the normal explanations and the missing evidence before concluding anything. To review: one quarter or a weak signal; a reader's judgement, not a pattern. Not triggered: the pattern is absent on these figures. Insufficient data: the filings read so far do not hold what the rule needs; this is not a clean bill. Not applicable: the rule is not meant for this kind of company (a bank's working capital, a loss-making quarter's EPS growth). Out of date: the latest filing is more than fifteen months old.
Severity is what the pattern could mean for cash, value or solvency; confidence is how reliable the inputs and the reading are. The two are kept apart.
Record a view
A reader's judgement, grounds, what would change it and the next review; kept in the browser (needs JavaScript).
Every rule and the companies it triggers on → Box: cash flow → Earnings quality score →
Each rule reads the company's own filings by a fixed formula and says what would explain the same figures innocently. A triggered rule is a question to verify, not a finding of manipulation, and not a view on the stock. Missing data is shown as missing, never as clear. Not investment advice.