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

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In the latest trading session, Dropbox (DBX - Free Report) closed at $29.72, marking a -0.1% move from the previous day. This change lagged the S&P 500's 0.2% gain on the day.

Prior to today's trading, shares of the online file-sharing company had gained 21.73% over the past month. This has outpaced the Computer and Technology sector's gain of 5.84% and the S&P 500's gain of 1.06% 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 $0.33 per share, which would represent year-over-year growth of 50%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $524 million, up 12.11% from the year-ago period.

DBX's full-year Zacks Consensus Estimates are calling for earnings of $1.33 per share and revenue of $2.12 billion. These results would represent year-over-year changes of +43.01% and +10.99%, respectively.

It is also important to note the recent changes to analyst estimates for DBX. These recent revisions tend to reflect the evolving nature of short-term business trends. 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. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. The Zacks Consensus EPS estimate has moved 3.17% higher within the past month. DBX is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note DBX's current valuation metrics, including its Forward P/E ratio of 22.44. This valuation marks a discount compared to its industry's average Forward P/E of 28.37.

It is also worth noting that DBX currently has a PEG ratio of 0.55. 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 1.93 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 190, which puts it in the bottom 26% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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