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Dropbox (DBX) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research
·3 min read

In the latest trading session, Dropbox (DBX) closed at $19.28, marking a -1.13% move from the previous day. This change lagged the S&P 500's daily loss of 1.12%. At the same time, the Dow lost 0.88%, and the tech-heavy Nasdaq lost 1.07%.

Heading into today, shares of the online file-sharing company had lost 3.27% over the past month, lagging the Computer and Technology sector's loss of 1.17% and the S&P 500's loss of 0.59% in that time.

Wall Street will be looking for positivity from DBX as it approaches its next earnings report date. The company is expected to report EPS of $0.19, up 46.15% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $482.57 million, up 12.7% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.77 per share and revenue of $1.90 billion. These totals would mark changes of +54% and +14.18%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for DBX. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. DBX currently has a Zacks Rank of #2 (Buy).

In terms of valuation, DBX is currently trading at a Forward P/E ratio of 25.19. Its industry sports an average Forward P/E of 38.35, so we one might conclude that DBX is trading at a discount comparatively.

We can also see that DBX currently has a PEG ratio of 0.73. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. DBX's industry had an average PEG ratio of 2.04 as of yesterday's close.

The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 186, which puts it in the bottom 27% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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