Stocks

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

In the latest trading session, Dropbox (DBX) closed at $21.85, marking a -1.71% move from the previous day. This change lagged the S&P 500's daily gain of 0.57%. Meanwhile, the Dow gained 1.44%, and the Nasdaq, a tech-heavy index, lost 0.61%.

Prior to today's trading, shares of the online file-sharing company had gained 2.96% over the past month. This has outpaced the Computer and Technology sector's gain of 1.94% and the S&P 500's gain of 0.83% in that time.

Investors will be hoping for strength from DBX as it approaches its next earnings release. The company is expected to report EPS of $0.23, up 43.75% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $498.06 million, up 11.67% from the year-ago period.

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. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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. The Zacks Consensus EPS estimate remained stagnant within the past month. DBX is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that DBX has a Forward P/E ratio of 22.14 right now. Its industry sports an average Forward P/E of 29.58, 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 0.54. 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 industry currently had an average PEG ratio of 1.65 as of yesterday's close.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 102, putting it in the top 40% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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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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