Here's Why Dropbox (DBX) Fell More Than Broader Market
In the latest close session, Dropbox (DBX) was down 1.07% at $27.66. The stock's performance was behind the S&P 500's daily loss of 0.14%. Elsewhere, the Dow lost 0.2%, while the tech-heavy Nasdaq lost 0.24%.
Shares of the online file-sharing company have depreciated by 4.64% over the course of the past month, underperforming the Computer and Technology sector's gain of 0.2%, and the S&P 500's gain of 0.94%.
The investment community will be paying close attention to the earnings performance of Dropbox in its upcoming release. It is anticipated that the company will report an EPS of $0.66, marking a 9.59% fall compared to the same quarter of the previous year. In the meantime, our current consensus estimate forecasts the revenue to be $627.51 million, indicating a 2.5% decline compared to the corresponding quarter of the prior year.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $2.82 per share and a revenue of $2.51 billion, representing changes of +13.25% and -1.41%, respectively, from the prior year.
Investors might also notice recent changes to analyst estimates for Dropbox. Recent revisions tend to reflect the latest near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has remained steady. Dropbox is currently sporting a Zacks Rank of #3 (Hold).
Investors should also note Dropbox's current valuation metrics, including its Forward P/E ratio of 9.9. This signifies a discount in comparison to the average Forward P/E of 19.48 for its industry.
We can also see that DBX currently has a PEG ratio of 1.61. 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 1.81 as of yesterday's close.
The Internet - Services industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 87, this industry ranks in the top 36% of all industries, numbering over 250.
The Zacks Industry Rank is ordered 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.
Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.
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Dropbox, Inc. (DBX): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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