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Dropbox (DBX) Ascends While Market Falls: Some Facts to Note

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Dropbox (DBX - Free Report) ended the recent trading session at $23.31, demonstrating a +0.56% swing from the preceding day's closing price. This move outpaced the S&P 500's daily loss of 1.39%. On the other hand, the Dow registered a gain of 0.6%, and the technology-centric Nasdaq decreased by 2.77%.

Prior to today's trading, shares of the online file-sharing company had gained 11.66% over the past month. This has outpaced the Computer and Technology sector's gain of 1.25% and the S&P 500's gain of 4.43% in that time.

The investment community will be closely monitoring the performance of Dropbox in its forthcoming earnings report. It is anticipated that the company will report an EPS of $0.52, marking a 1.96% rise compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $629.65 million, reflecting a 1.15% rise from the equivalent quarter last year.

DBX's full-year Zacks Consensus Estimates are calling for earnings of $2.12 per share and revenue of $2.54 billion. These results would represent year-over-year changes of +7.07% and +1.66%, respectively.

Investors might also notice recent changes to analyst estimates for Dropbox. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. As of now, Dropbox holds a Zacks Rank of #3 (Hold).

With respect to valuation, Dropbox is currently being traded at a Forward P/E ratio of 10.93. For comparison, its industry has an average Forward P/E of 24.18, which means Dropbox is trading at a discount to the group.

Also, we should mention that DBX has a PEG ratio of 0.96. 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. As of the close of trade yesterday, the Internet - Services industry held an average PEG ratio of 2.17.

The Internet - Services industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 93, positioning it in the top 37% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.


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