Back to top

Image: Bigstock

Dropbox (DBX) Gains But Lags Market: What You Should Know

Read MoreHide Full Article

In the latest trading session, Dropbox (DBX - Free Report) closed at $26.37, marking a +0.19% move from the previous day. This change lagged the S&P 500's 1.11% gain on the day.

Heading into today, shares of the online file-sharing company had lost 5.69% over the past month, lagging the Computer and Technology sector's gain of 8.47% and the S&P 500's gain of 4.72% in that time.

DBX will be looking to display strength as it nears its next earnings release. On that day, DBX is projected to report earnings of $0.30 per share, which would represent year-over-year growth of 76.47%. Our most recent consensus estimate is calling for quarterly revenue of $505.01 million, up 10.99% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.25 per share and revenue of $2.1 billion, which would represent changes of +34.41% and +9.93%, respectively, from the prior year.

Any recent changes to analyst estimates for DBX should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. DBX is currently sporting a Zacks Rank of #2 (Buy).

Investors should also note DBX's current valuation metrics, including its Forward P/E ratio of 20.88. This represents a discount compared to its industry's average Forward P/E of 32.57.

We can also see that DBX currently has a PEG ratio of 0.51. 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. Internet - Services stocks are, on average, holding a PEG ratio of 1.84 based on yesterday's closing prices.

The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 151, putting it in the bottom 41% 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.

To follow DBX in the coming trading sessions, be sure to utilize

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Dropbox, Inc. (DBX) - free report >>

Published in