Dropbox (DBX) Stock Sinks As Market Gains: What You Should Know

Dropbox (DBX) closed the most recent trading day at $19.78, moving -0.55% from the previous trading session. This move lagged the S&P 500's daily gain of 0.47%. Meanwhile, the Dow gained 0.4%, and the Nasdaq, a tech-heavy index, added 0.33%.

Heading into today, shares of the online file-sharing company had gained 3.43% over the past month, lagging the Computer and Technology sector's gain of 6.61% and outpacing the S&P 500's gain of 3.42% in that time.

Investors will be hoping for strength from DBX as it approaches its next earnings release, which is expected to be November 5, 2020. On that day, DBX is projected to report earnings of $0.19 per share, which would represent year-over-year growth of 46.15%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $482.57 million, up 12.7% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.77 per share and revenue of $1.90 billion. These totals would mark changes of +54% and +14.18%, respectively, from last year.

Any recent changes to analyst estimates for DBX should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. DBX is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that DBX has a Forward P/E ratio of 25.7 right now. Its industry sports an average Forward P/E of 38.64, so we one might conclude that DBX is trading at a discount comparatively.

Also, we should mention that DBX has a PEG ratio of 0.75. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Internet - Services was holding an average PEG ratio of 2.1 at yesterday's closing price.

The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 198, which puts it in the bottom 22% of all 250+ industries.

The Zacks Industry Rank includes is listed in order 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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