The latest trading session saw Dropbox (DBX) ending at $26.93, denoting a +0.71% adjustment from its last day's close. This change outpaced the S&P 500's 0.17% loss on the day. Elsewhere, the Dow saw a downswing of 0.39%, while the tech-heavy Nasdaq depreciated by 0.05%.
Prior to today's trading, shares of the online file-sharing company had gained 1.75% over the past month. This has outpaced the Computer and Technology sector's loss of 6.26% and the S&P 500's loss of 3.94% in that time.
The investment community will be paying close attention to the earnings performance of Dropbox in its upcoming release. The company's earnings per share (EPS) are projected to be $0.62, reflecting a 6.9% increase from the same quarter last year. Simultaneously, our latest consensus estimate expects the revenue to be $619.06 million, showing a 1.94% drop compared to the year-ago quarter.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $2.54 per share and revenue of $2.47 billion, indicating changes of +2.01% and -2.9%, respectively, compared to the previous year.
Investors should also note any recent changes to analyst estimates for Dropbox. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable 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 last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. Dropbox is currently a Zacks Rank #1 (Strong Buy).
Looking at its valuation, Dropbox is holding a Forward P/E ratio of 10.52. This expresses a discount compared to the average Forward P/E of 18.47 of its industry.
Also, we should mention that DBX has a PEG ratio of 0.92. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Internet - Services industry had an average PEG ratio of 1.18 as trading concluded yesterday.
The Internet - Services industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 135, this industry ranks in the bottom 46% 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.
Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.
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Dropbox, Inc. (DBX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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