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

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Dropbox (DBX - Free Report) closed at $23.61 in the latest trading session, marking a +1.11% move from the prior day. This change outpaced the S&P 500's 0.04% gain on the day. At the same time, the Dow added 0.19%, and the tech-heavy Nasdaq gained 0.28%.

Coming into today, shares of the online file-sharing company had gained 0.13% in the past month. In that same time, the Computer and Technology sector gained 4.2%, while the S&P 500 gained 3.84%.

Investors will be hoping for strength from DBX as it approaches its next earnings release. On that day, DBX is projected to report earnings of $0.23 per share, which would represent year-over-year growth of 43.75%. Meanwhile, our latest consensus estimate is calling for revenue of $498.06 million, up 11.67% from the prior-year quarter.

It is also important to note the recent changes to analyst estimates for DBX. These revisions help to show the ever-changing nature 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 shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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 remained stagnant. DBX is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, DBX is currently trading at a Forward P/E ratio of 23.26. This valuation marks a discount compared to its industry's average Forward P/E of 31.15.

We can also see that DBX currently has a PEG ratio of 0.57. 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 industry currently had an average PEG ratio of 2.04 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 170, putting it in the bottom 34% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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