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

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  • DBX

Dropbox (DBX) closed at $30.21 in the latest trading session, marking a +1.24% move from the prior day. This move outpaced the S&P 500's daily gain of 0.33%.

Heading into today, shares of the online file-sharing company had gained 7.45% over the past month, outpacing the Computer and Technology sector's gain of 6.03% and the S&P 500's gain of 1.74% in that time.

DBX will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.33, up 50% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $524 million, up 12.11% from the year-ago period.

DBX's full-year Zacks Consensus Estimates are calling for earnings of $1.36 per share and revenue of $2.12 billion. These results would represent year-over-year changes of +46.24% and +10.99%, respectively.

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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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 is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, DBX is currently trading at a Forward P/E ratio of 21.9. Its industry sports an average Forward P/E of 28.87, so we one might conclude that DBX is trading at a discount comparatively.

Meanwhile, DBX's PEG ratio is currently 0.54. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Internet - Services was holding an average PEG ratio of 2.12 at yesterday's closing price.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 196, putting it in the bottom 23% 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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