In the latest close session, Dropbox (DBX) was up +1.5% at $23.75. The stock exceeded the S&P 500, which registered a gain of 0.44% for the day. Meanwhile, the Dow gained 0.36%, and the Nasdaq, a tech-heavy index, added 0.54%.
The online file-sharing company’s stock has dropped by 12.65% in the past month, falling short of the Computer and Technology sector’s loss of 2.47% and the S&P 500’s loss of 3.31%.
The investment community will be closely monitoring the performance of Dropbox in its forthcoming earnings report. The company is expected to report EPS of $0.71, up 1.43% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $619.51 million, down 0.83% from the year-ago period.
For the full year, the Zacks Consensus Estimates project earnings of $3.05 per share and a revenue of $2.49 billion, demonstrating changes of +7.39% and -1.13%, respectively, from the preceding year.
It’s also important for investors to be aware of any recent modifications to analyst estimates for Dropbox. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. 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, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, there’s been no change in the Zacks Consensus EPS estimate. 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 7.67. This expresses a discount compared to the average Forward P/E of 13.98 of its industry.
Meanwhile, DBX’s PEG ratio is currently 1.1. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company’s expected earnings growth trajectory. By the end of yesterday’s trading, the Internet – Services industry had an average PEG ratio of 1.86.
The Internet – Services industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 171, finds itself in the bottom 30% echelons of all 250+ industries.
