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

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Dropbox (DBX - Free Report) closed at $29.56 in the latest trading session, marking a +1.55% move from the prior day. The stock exceeded the S&P 500, which registered a gain of 0.58% for the day.

The online file-sharing company's stock has dropped by 6.7% in the past month, falling short of the Computer and Technology sector's gain of 6.37% and the S&P 500's gain of 3.68%.

Investors will be eagerly watching for the performance of Dropbox in its upcoming earnings disclosure. It is anticipated that the company will report an EPS of $0.64, marking a 6.67% rise compared to the same quarter of the previous year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $621.66 million, down 2.68% from the year-ago period.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $2.69 per share and a revenue of $2.49 billion, representing changes of +8.03% and -2.24%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for Dropbox. These revisions help to show the ever-changing nature of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.37% higher. Dropbox currently has a Zacks Rank of #3 (Hold).

Digging into valuation, Dropbox currently has a Forward P/E ratio of 10.82. This denotes a discount relative to the industry average Forward P/E of 24.75.

We can also see that DBX currently has a PEG ratio of 2.55. 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. The Internet - Services industry had an average PEG ratio of 1.67 as trading concluded yesterday.

The Internet - Services industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 66, placing it within the top 27% of over 250 industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.


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