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Dropbox (DBX) Laps the Stock Market: Here's Why

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The latest trading session saw Dropbox (DBX - Free Report) ending at $24.59, denoting a +1.32% adjustment from its last day's close. This move outpaced the S&P 500's daily gain of 0.54%. Elsewhere, the Dow gained 0.72%, while the tech-heavy Nasdaq added 0.65%.

Heading into today, shares of the online file-sharing company had gained 6.45% over the past month, outpacing the Computer and Technology sector's gain of 3.3% and the S&P 500's gain of 4.86% in that time.

Market participants will be closely following the financial results of Dropbox in its upcoming release. The company is expected to report EPS of $0.52, down 7.14% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $636.93 million, up 0.62% from the year-ago period.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $2.22 per share and a revenue of $2.54 billion, representing changes of +12.12% and +1.73%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for Dropbox. Such recent modifications usually signify the changing landscape of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. At present, Dropbox boasts a Zacks Rank of #3 (Hold).

Investors should also note Dropbox's current valuation metrics, including its Forward P/E ratio of 10.93. This indicates a discount in contrast to its industry's Forward P/E of 30.5.

We can also see that DBX currently has a PEG ratio of 0.89. 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 average PEG ratio for the Internet - Services industry stood at 2.12 at the close of the market yesterday.

The Internet - Services industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 92, this industry ranks in the top 37% of all industries, numbering over 250.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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