Dropbox (DBX) AI Stock Analysis

• Market Cap: $8.48B
• Dividend Yield: N/A
• Average Volume (3M): 3.90M
• Price to Earnings (P/E): 19.4
• Beta (1Y): 0.87
• Revenue Growth: 0.79%
• EPS Growth: 0.59%
• Country: US
• Employees: 2,204
• Sector: Technology
• Sector Strength: 65
• Industry: Software - Infrastructure
• EPS (TTM): 0.70
• Shares Outstanding: 210,988,480
• 10 Day Avg. Volume: 3,746,593
• 30 Day Avg. Volume: 3,902,666
• PEG Ratio: -0.98
• Price to Book (P/B): -10.64
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 9.20
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $31.00
• Price Target Upside: 5.84% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 8

Dropbox's overall score reflects solid financial performance and positive technical momentum, supported by strong cash flow and strategic initiatives. While financial risks from high leverage and declining net profit margins are concerns, they are mitigated by substantial liquidity. The valuation is fair, and recent earnings guidance is optimistic despite challenges. The stock is well-positioned but cautious monitoring of financial risks and user trends is advised.

Positive Factors

AI Innovation

The company's significant update to Dropbox Dash includes advanced AI tools, enhancing its appeal in generative AI innovations.

Financial Performance

Dropbox achieved a record high operating margin of 41.7%, surpassing the previous quarter's margin and analyst estimates.

Investment Appeal

Dropbox's stock may attract value investors due to its modest valuation, robust stock repurchase program, and substantial cost reduction efforts.

Negative Factors

Revenue Growth Challenges

Despite strong margins, Dropbox continues to face challenges with revenue growth and fierce competition.

Revenue Outlook

Dropbox’s revenue growth is projected to turn negative for the first time in its history, marking the weakest performance ever.

User Metrics Decline

There was another decline in paying users, with the average revenue per user slightly decreasing compared to previous quarters.

Dropbox Business Overview & Revenue Model

Company Description

Dropbox, Inc. provides a content collaboration platform worldwide. Its platform allows individuals, families, teams, and organizations to collaborate and sign up for free through its website or app, as well as upgrade to a paid subscription plan for premium features. As of December 31, 2021, the company had approximately 700 million registered users. It serves customers in professional services, technology, media, education, industrial, consumer and retail, and financial services industries. The company was formerly known as Evenflow, Inc. and changed its name to Dropbox, Inc. in October 2009. Dropbox, Inc. was incorporated in 2007 and is headquartered in San Francisco, California.

How the Company Makes Money

Dropbox makes money primarily through its subscription-based revenue model. Users can access basic services for free but are encouraged to upgrade to paid plans that offer additional storage, features, and capabilities. The company's key revenue streams include individual users subscribing to Dropbox Plus and Family plans, as well as teams and enterprises opting for Dropbox Business and Advanced plans. Dropbox also generates revenue from its HelloSign e-signature service and other productivity tools. Partnerships with technology companies and integration with third-party applications enhance the platform’s functionality, driving user engagement and retention, which in turn supports the company's revenue growth.

Dropbox Financial Statement Overview

Summary

Dropbox exhibits solid financial health with strong revenue growth and cash flow generation. The company maintains high profitability margins, though slightly declining net profits warrant attention. The balance sheet poses risks due to negative equity and high leverage, but substantial cash reserves provide a buffer.

Income Statement

Dropbox shows strong financial performance with consistent revenue growth, evidenced by a 1.86% increase in TTM. The gross profit margin stands at 82.53%, indicating effective cost management. However, the net profit margin slightly decreased to 17.75% in TTM. Despite this, the company maintains solid EBIT and EBITDA margins at 19.08%, showcasing operational efficiency.

Balance Sheet

Dropbox's balance sheet reflects a high debt-to-equity ratio due to negative stockholders' equity, indicating financial risk. Despite this, the company has improved its equity position over time. The equity ratio is negative, suggesting liabilities exceed assets, which is a concern. However, the company maintains a substantial cash reserve, offering liquidity.

Cash Flow

Dropbox demonstrates robust cash flow generation with a 14.83% growth in free cash flow. The operating cash flow to net income ratio is strong at 1.98, indicating excellent conversion of income to cash. The free cash flow to net income ratio of 1.93 further underscores efficient cash management.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
2.55B	2.50B	2.32B	2.16B	1.91B
	Gross Profit
2.10B	2.02B	1.88B	1.71B	1.50B
	EBIT
486.20M	383.50M	531.70M	274.40M	519.40M
	EBITDA
486.20M	553.50M	688.80M	463.30M	678.70M
	Net Income Common Stockholders
452.30M	453.60M	553.20M	335.80M	-256.30M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.59B	1.36B	1.34B	1.72B	1.12B
	Total Assets
3.33B	2.98B	3.11B	3.09B	2.39B
	Total Debt
2.03B	2.03B	2.29B	2.37B	1.12B
	Net Debt
705.40M	1.42B	2.06B	1.84B	804.60M
	Total Liabilities
4.08B	3.15B	3.42B	3.39B	2.05B
	Stockholders Equity
-752.40M	-165.80M	-309.40M	-293.90M	333.80M
Cash Flow		Free Cash Flow
871.60M	759.10M	762.40M	700.90M	490.50M
	Operating Cash Flow
894.10M	783.70M	797.30M	729.80M	570.80M
	Investing Cash Flow
443.80M	395.20M	-48.50M	-524.80M	-233.60M
	Financing Cash Flow
-586.60M	-799.20M	-1.04B	16.20M	-577.70M

Dropbox Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 29.29
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DBX, the sentiment is Positive. The current price of 29.29 is above the 20-day moving average (MA) of 28.24, above the 50-day MA of 27.10, and above the 200-day MA of 27.17, indicating a bullish trend. The MACD of 0.63 indicates Negative momentum. The RSI at 61.72 is Neutral, neither overbought nor oversold. The STOCH value of 66.81 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DBX.

Dropbox Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BOX	75 Outperform	$4.63B	23.73	189.40%	―	5.05%	103.11%
DBX	74 Outperform	$8.48B	19.36	-60.11%	―	0.79%	0.59%
AVPT	65 Neutral	$3.84B	―	-8.39%	―	21.70%	-67.95%
BAND	64 Neutral	$418.76M	―	-0.32%	―	18.51%	97.57%
DOCN	64 Neutral	$2.66B	26.71	-41.63%	―	13.21%	109.61%
Sector *	60 Neutral	$11.39B	10.50	-6.42%	2.97%	7.77%	-11.17%
CFLT	58 Neutral	$7.03B	―	-34.18%	―	24.11%	21.87%

Dropbox Corporate Events

Dropbox Reports Q1 2025 Financial Results with Revenue Dip

On May 8, 2025, Dropbox announced its fiscal 2025 first-quarter financial results, reporting a revenue of $624.7 million, which marks a 1.0% decrease from the previous year. Despite the revenue decline, the company improved its GAAP operating margin to 29.4% and non-GAAP operating margin to 41.7%, attributed partly to a reduction in stock-based compensation. The company also highlighted its focus on enhancing the Dash user experience and introduced new features to address customer needs. The macroeconomic environment remains challenging, but Dropbox is committed to refining its execution and increasing operational efficiency to capitalize on opportunities and create shareholder value.

Spark’s Take on DBX Stock

According to Spark, TipRanks’ AI Analyst, DBX is a Outperform.

Dropbox’s overall stock score reflects strong financial health and strategic focus on AI and shareholder value. Despite robust cash flow and revenue growth, high financial leverage and declining user base introduce risks. The technical analysis indicates neutral momentum, and the valuation appears fair, balancing the strengths and challenges.

To see Spark’s full report on DBX stock, click here.

Dropbox Announces Departure of Chief Customer Officer

On April 11, 2025, Dropbox, Inc. announced that Eric Cox will step down as Chief Customer Officer. He will assist with the transition and remain as a non-executive employee until mid-August.

Spark’s Take on DBX Stock

According to Spark, TipRanks’ AI Analyst, DBX is a Neutral.

Dropbox’s stock score reflects solid financial performance and strategic initiatives to enhance growth, balanced by technical challenges and valuation considerations. Strong cash flow and strategic investments provide a positive outlook, but technical indicators suggest caution in the short term.

To see Spark’s full report on DBX stock, click here.

Dropbox Reports Q4 2024 Financial Results and Strategic Moves

Dropbox reported its financial results for the fourth quarter and fiscal year 2024, showing a modest increase in revenue and a robust free cash flow. The company highlighted its progress with its AI-powered product, Dash for Business, and its ongoing efforts to restructure its core operations to improve efficiency. The year marked significant financial activities, including a $2 billion credit agreement and share repurchases totaling $1.2 billion, which reflect Dropbox’s strategic focus on enhancing shareholder value and operational strength.