Dropbox, Inc.'s (NASDAQ:DBX): Dropbox, Inc. provides a collaboration platform worldwide. With the latest financial year loss of -US$484.9m and a trailing-twelve month of -US$44.4m, the US$7.6b market-cap alleviates its loss by moving closer towards its target of breakeven. As path to profitability is the topic on DBX’s investors mind, I’ve decided to gauge market sentiment. Below I will provide a high-level summary of the industry analysts’ expectations for DBX.
Consensus from the 14 Software analysts is DBX is on the verge of breakeven. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$7.6m in 2021. DBX is therefore projected to breakeven around 2 years from today. How fast will DBX have to grow each year in order to reach the breakeven point by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 83% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, I won’t go into details of DBX’s upcoming projects, however, bear in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing I’d like to point out is that DBX has no debt on its balance sheet, which is rare for a loss-making loss-making, growth company, which usually has a high level of debt relative to its equity. DBX currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
This article is not intended to be a comprehensive analysis on DBX, so if you are interested in understanding the company at a deeper level, take a look at DBX’s company page on Simply Wall St. I’ve also put together a list of pertinent factors you should look at:
- Valuation: What is DBX worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether DBX is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Dropbox’s board and the CEO’s back ground.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
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