Cloud storage services provider Dropbox, Inc. (DBX) has reported better-than-expected results for the second quarter ended June 30, 2021 on the back of growth in revenues. Following the news, shares of the company rose 3.2% to close at $32.60 in the extended trading session.
Quarterly revenues stood at $530.6 million, up 13.5% from the same quarter last year. Moreover, the figure topped the consensus estimate of $524.06 million.
Earnings per share (EPS) jumped 82% year-over-year to $0.40, surpassing the Street’s estimate of $0.33.
Notably, the company reported a rise in paying users and average revenue per paying user. At the end of the quarter, paying users stood at 16.14 million, up 7.9% from last year. The average revenue per paying user was $133.15, up from last year’s $126.88.
The CEO of Dropbox, Drew Houston, said, “Q2 was a standout quarter, driven by strong revenue growth, record free cash flow, and margin expansion. Our results reflect the strength of our business model and our ability to make significant progress on our strategic objectives. We’re proud of our execution this quarter as we delivered even more value to our customers and shareholders and are excited about the opportunity ahead to build next-generation tools to support the new world of distributed work.” (See Dropbox stock chart on TipRanks)
Two months ago, RBC Capital analyst Rishi Jaluria initiated coverage on the stock with a Buy rating and a price target of $35. The analyst’s price target implies upside potential of 10.8% from current levels.
According to the analyst, the company’s market leadership position, differentiated strategy, margin expansion and reasonable valuation give it a strong footing.
The Street is cautiously optimistic about the stock with a Moderate Buy consensus based on 3 Buys, 1 Hold and 1 Sell. The average Dropbox price target of $30.33 implies that the stock has 4% downside potential from current levels.
Dropbox scores an 8 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations. Shares have gained about 35.7% over the past year.