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Dropbox (DBX) to Report Q4 Earnings: What's in the Cards?

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Dropbox DBX is slated to report fourth-quarter 2019 results on Feb 20.

For the quarter, the company expects revenues between $442 million and $444 million. The Zacks Consensus Estimate for revenues is pegged at $443.2 million, indicating growth of 17.9% from the figure reported in the year-ago quarter.

Moreover, the consensus mark for fourth-quarter earnings stayed at 14 cents per share over the past 30 days, implying growth of 40% from the figure reported in the year-ago quarter.

Notably, the company beat the Zacks Consensus Estimate in the trailing four quarters, the average positive surprise being 33.7%.
 

Dropbox, Inc. Price and EPS Surprise

Dropbox, Inc. Price and EPS Surprise

Dropbox, Inc. price-eps-surprise | Dropbox, Inc. Quote

 

Let’s see how things have shaped up prior to this announcement.

Factors to Watch

Dropbox’s new desktop app, which was available from Sep 25, 2019, is expected to have gained significant traction in the fourth quarter. The company’s focus on helping users access and synchronize files, and utilize applications through multiple devices has been enhancing user experience.

Moreover, a strong focus on product innovation and introduction of new features like Dropbox Spaces, Paper and Extensions are anticipated to have provided the company with a competitive edge.

Further, integration with leading applications like Zoom, Slack and Atlassian is expected to have expanded the paying user base, which reached 14 million in the third quarter.

Dropbox’s fourth-quarter top line is likely to reflect the aforesaid factors.

However, increasing investments in product enhancements and other growth strategies are likely to have limited margin expansion in the fourth quarter.

What Our Model Says

According to the Zacks model, a company with a positive Earnings ESP along with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates. But that is not the case here.

Dropbox has a Zacks Rank #3 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With Favorable Combinations

Here are some companies, which, per our model, have the right combination of elements to post an earnings beat this quarter:

Autohome ATHM has an Earnings ESP of +4.84% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Square (SQ - Free Report) has an Earnings ESP of +3.59% and a Zacks Rank #3.

Zillow Group ZG has an Earnings ESP of +22.22% and a Zacks Rank #3.

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