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Dropbox (DBX) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
·3 mins read

Dropbox (DBX) closed at $19.66 in the latest trading session, marking a +1.97% move from the prior day. The stock outpaced the S&P 500's daily gain of 1.74%. At the same time, the Dow added 1.91%, and the tech-heavy Nasdaq gained 1.88%.

Coming into today, shares of the online file-sharing company had lost 3.02% in the past month. In that same time, the Computer and Technology sector lost 1.67%, while the S&P 500 lost 1.86%.

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.

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 should also note any 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.

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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. DBX currently has a Zacks Rank of #1 (Strong Buy).

Valuation is also important, so investors should note that DBX has a Forward P/E ratio of 24.91 right now. This represents a discount compared to its industry's average Forward P/E of 38.23.

Meanwhile, DBX's PEG ratio is currently 0.72. 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. The Internet - Services was holding an average PEG ratio of 1.99 at yesterday's closing price.

The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 124, which puts it in the top 50% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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