What Are Analysts Saying About Dropbox Inc’s (NASDAQ:DBX) Long Term Outlook?
The latest earnings announcement Dropbox Inc’s (NASDAQ:DBX) released in December 2017 indicated that losses became smaller relative to the prrior year’s level as a result of recent tailwinds Below is a brief commentary on my key takeaways on how market analysts predict Dropbox’s earnings growth outlook over the next few years and whether the future looks brighter. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings. See our latest analysis for Dropbox
Market analysts’ prospects for the upcoming year seems pessimistic, with earnings becoming even more negative, arriving at -US$579.88M in 2019. However, earnings are predicted to move into an upward trajectory, generating -US$118.55M in 2020, and -US$77.64M in 2021.
While it is helpful to understand the rate of growth each year relative to today’s value, it may be more beneficial to analyze the rate at which the company is moving every year, on average. The advantage of this technique is that we can get a bigger picture of the direction of Dropbox’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To compute this rate, I’ve inserted a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 75.54%. This means that, we can assume Dropbox will grow its earnings by 75.54% every year for the next couple of years.
Next Steps:
For Dropbox, I’ve compiled three fundamental factors you should look at:
Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Valuation: What is DBX worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether DBX is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of DBX? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
