Markets

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

Dropbox (DBX) closed the most recent trading day at $20.34, moving +1.55% from the previous trading session. This move outpaced the S&P 500's daily loss of 0.63%. Elsewhere, the Dow lost 0.55%, while the tech-heavy Nasdaq lost 0.1%.

Coming into today, shares of the online file-sharing company had lost 0.74% in the past month. In that same time, the Computer and Technology sector gained 8.45%, while the S&P 500 gained 5.91%.

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. Our most recent consensus estimate is calling for quarterly revenue of $482.57 million, up 12.7% from the year-ago period.

DBX's full-year Zacks Consensus Estimates are calling for earnings of $0.77 per share and revenue of $1.90 billion. These results would represent year-over-year changes of +54% and +14.18%, respectively.

It is also important to note the recent changes to analyst estimates for DBX. Recent revisions tend to reflect the latest near-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.

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. Within the past 30 days, our consensus EPS projection remained stagnant. DBX currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, DBX is holding a Forward P/E ratio of 25.88. Its industry sports an average Forward P/E of 38.64, so we one might conclude that DBX is trading at a discount comparatively.

We can also see that DBX currently has a PEG ratio of 0.75. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Internet - Services was holding an average PEG ratio of 2.15 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 195, which puts it in the bottom 23% 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.

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


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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