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

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Dropbox (DBX - Free Report) closed the most recent trading day at $28.34, moving 1.03% from the previous trading session. This change outpaced the S&P 500's 0.17% loss on the day. Meanwhile, the Dow lost 0.3%, and the Nasdaq, a tech-heavy index, lost 0.14%.

Prior to today's trading, shares of the online file-sharing company had lost 10.32% over the past month. This has lagged the Computer and Technology sector's gain of 0.61% and the S&P 500's gain of 2.34% in that time.

DBX will be looking to display strength as it nears its next earnings release, which is expected to be November 8, 2018.

Investors might also notice recent changes to analyst estimates for DBX. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. 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, 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 has moved 8% higher. DBX currently has a Zacks Rank of #3 (Hold).

Digging into valuation, DBX currently has a Forward P/E ratio of 92.44. This valuation marks a premium compared to its industry's average Forward P/E of 32.76.

Investors should also note that DBX has a PEG ratio of 6.16 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. DBX's industry had an average PEG ratio of 2.6 as of yesterday's close.

The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 162, which puts it in the bottom 36% 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.

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


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