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

Zacks Equity Research
·3 min read

Dropbox (DBX) closed the most recent trading day at $22.60, moving -1.44% from the previous trading session. This change lagged the S&P 500's 0.13% gain on the day. At the same time, the Dow added 0.24%, and the tech-heavy Nasdaq gained 0.15%.

Prior to today's trading, shares of the online file-sharing company had gained 13.68% over the past month. This has outpaced the Computer and Technology sector's gain of 4.54% and the S&P 500's gain of 2.59% 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 $0.23 per share. This would mark year-over-year growth of 43.75%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $498.06 million, up 11.67% from the year-ago period.

DBX's full-year Zacks Consensus Estimates are calling for earnings of $0.88 per share and revenue of $1.91 billion. These results would represent year-over-year changes of +76% and +14.84%, respectively.

Investors might also notice recent changes to analyst estimates for DBX. These recent revisions tend to reflect the evolving nature of short-term business trends. 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.

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 is currently a Zacks Rank #2 (Buy).

Digging into valuation, DBX currently has a Forward P/E ratio of 25.94. This represents a discount compared to its industry's average Forward P/E of 29.48.

Meanwhile, DBX's PEG ratio is currently 0.63. 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 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 125, which puts it in the top 50% 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.

To follow DBX in the coming trading sessions, be sure to utilize Zacks.com.

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Dropbox, Inc. (DBX) : Free Stock Analysis Report
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