Granted, Dropbox (NASDAQ:DBX) offers some useful software, especially for people who need to move digital files around. But with increasing return-to-office calls and outright layoffs cropping up, the end result is a little uncertain. And that uncertainty sent Dropbox stock down around 2% in the closing minutes of Friday’s trading session.
Dropbox’s losses were more pronounced in the earlier hours of Friday’s trading, down around 4% at one point, so the market saw some potential for a recovery. But Dropbox’s range modification for several key metrics didn’t help matters. Dropbox noted it looks for fourth quarter revenue to come in between $629 million and $632 million. That doesn’t compare well against analyst consensus, which looked for $631.24 million. The full-year 2023’s numbers got slightly better treatment, raised to $2.496 billion to $2.499 billion. Further, Dropbox also cut its projections of free cash flow, down to $775 million to $785 million.
The latest earnings report, meanwhile, featured CFO Tim Regan noting that Dropbox is facing an “uncertain” macro environment—which surprised no one—but that Dropbox is currently seeing strength in many of its SKUs. However, there are some down spots, including what Regan called “seasonal softness” in FormSwift. Further, Dropbox took something of a stance on the return-to-office movement, noting that employees were “…not resources to control,” and calling for businesses to “…trust people and treat them like adults.” This isn’t surprising given that Dropbox benefits substantially from remote work, but the dividing lines in this debate generally seem at least somewhat partisan.
Is Dropbox a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on DBX stock based on three Buys, three Holds and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average DBX price target of $29.40 per share implies 13.23% upside potential.
