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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.