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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 $19.03, marking a -0.5% move from the previous day. This change lagged the S&P 500's 0.3% loss on the day. Elsewhere, the Dow lost 0.8%, while the tech-heavy Nasdaq added 0.64%.

Coming into today, shares of the online file-sharing company had lost 0.8% in the past month. In that same time, the Computer and Technology sector gained 4.11%, while the S&P 500 gained 3.25%.

Wall Street will be looking for positivity from DBX as it approaches its next earnings report date. This is expected to be November 5, 2020. On that day, DBX is projected to report earnings of $0.19 per share, which would represent year-over-year growth of 46.15%. Our most recent consensus estimate is calling for quarterly revenue of $482.57 million, up 12.7% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.77 per share and revenue of $1.90 billion, which would represent changes of +54% and +14.18%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for DBX. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. DBX is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that DBX has a Forward P/E ratio of 24.71 right now. This represents a discount compared to its industry's average Forward P/E of 36.87.

Investors should also note that DBX has a PEG ratio of 0.72 right now. 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. The Internet - Services industry currently had an average PEG ratio of 2.17 as of yesterday's close.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 205, putting it in the bottom 19% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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