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Dropbox (DBX) Gains But Lags Market: What You Should Know

Zacks Equity Research
·3 min read

In the latest trading session, Dropbox (DBX) closed at $21.78, marking a +0.05% move from the previous day. The stock lagged the S&P 500's daily gain of 0.5%. Elsewhere, the Dow lost 0.3%, while the tech-heavy Nasdaq added 0.95%.

Heading into today, shares of the online file-sharing company had lost 6.45% over the past month, lagging the Computer and Technology sector's gain of 5.8% and the S&P 500's gain of 1.89% in that time.

Investors will be hoping for strength from DBX as it approaches its next earnings release. In that report, analysts expect DBX to post earnings of $0.17 per share. This would mark year-over-year growth of 70%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $464.68 million, up 15.74% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.75 per share and revenue of $1.89 billion. These totals would mark changes of +50% and +13.68%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for DBX. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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. Over the past month, the Zacks Consensus EPS estimate has moved 96.15% higher. DBX is holding a Zacks Rank of #1 (Strong Buy) right now.

Looking at its valuation, DBX is holding a Forward P/E ratio of 29.22. This represents a discount compared to its industry's average Forward P/E of 31.57.

Investors should also note that DBX has a PEG ratio of 0.9 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Internet - Services stocks are, on average, holding a PEG ratio of 2.96 based on yesterday's closing prices.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 76, putting it in the top 30% 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.

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


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Zacks Investment Research