J.P. Morgan analyst Mark Murphy maintained a Hold rating on Dropbox (DBX – Research Report) today and set a price target of $29.00.
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Mark Murphy’s rating is based on a combination of factors that reflect both positive and challenging aspects of Dropbox’s current financial situation. The company reported a slight decline in revenue year-over-year, although it managed to exceed consensus expectations in terms of profit margins and free cash flow. Despite these positive elements, the revenue growth trend has been softening, and the guidance for the upcoming quarter aligns closely with expectations, indicating no significant improvement in the short term.
Additionally, while Dropbox is making progress with its AI-powered Dash product and efforts to streamline its core business, these initiatives are still in their early stages and will require time to impact revenue growth meaningfully. The company’s shares are considered fairly valued at present, given the ongoing challenges to top-line growth and the early phase of product and go-to-market enhancements. Therefore, the Hold rating reflects a balanced view of Dropbox’s strong profitability framework against the backdrop of current growth headwinds.
In another report released today, Citi also reiterated a Hold rating on the stock with a $32.00 price target.