Dropbox Inc (DBX)
NASDAQ:DBX
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Dropbox
(NASDAQ:DBX)
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Rating:60Neutral
Price Target:
$24.00
▲(5.73% Upside)
Action:ReiteratedDate:02/20/26
DBX scores as a mid-range setup driven by strong margins and free cash flow, but constrained by balance-sheet risk (negative equity), limited/flat growth outlook per guidance, and weak technical momentum with the stock trading below key moving averages. Valuation is moderate (P/E ~14) but lacks dividend support.
Positive Factors
High margins and profitability
Dropbox exhibits durable, high-margin SaaS economics: ~80% gross margins and ~20% net margins with non‑GAAP operating margins near 38%. These sustained margins enable strong cash conversion, fund product investment or buybacks, and provide resilience versus cyclical revenue pressure.
Negative Factors
Negative shareholders' equity
Negative shareholders' equity is a persistent structural weakness that complicates leverage metrics, increases refinancing and covenant risk, and reduces financial flexibility. It raises the hurdle for deleveraging and makes downside scenarios more damaging to solvency.
Read all positive and negative factors
Positive Factors
Negative Factors
High margins and profitability
Dropbox exhibits durable, high-margin SaaS economics: ~80% gross margins and ~20% net margins with non‑GAAP operating margins near 38%. These sustained margins enable strong cash conversion, fund product investment or buybacks, and provide resilience versus cyclical revenue pressure.
Read all positive factors
Dropbox (DBX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.29B
Dividend YieldN/A
Average Volume (3M)3.61M
Price to Earnings (P/E)14.7
Beta (1Y)0.79
Revenue Growth-0.44%
EPS Growth2.47%
CountryUS
Employees2,204
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)0.68
Shares Outstanding157,414,980
10 Day Avg. Volume2,848,590
30 Day Avg. Volume3,610,436
Financial Highlights & Ratios
PEG Ratio0.44
Price to Book (P/B)-4.15
Price to Sales (P/S)2.96
P/FCF Ratio8.01
Enterprise Value/Market Cap1.71
Enterprise Value/Revenue3.58
Enterprise Value/Gross Profit4.46
Enterprise Value/Ebitda10.22
Forecast
1Y Price Target
$26.25Price Target Upside15.64% Upside
Rating ConsensusHold
Number of Analyst Covering6
EPS Forecast (FY)2.98
Revenue Forecast (FY)$2.50B
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 f...
How the Company Makes Money
Dropbox primarily makes money through subscription revenue from paid plans for individuals, teams, and businesses. Users typically start on a free tier with limited features or storage, and a portion convert to paid offerings that provide addition...
Dropbox Key Performance Indicators (KPIs)
Any
Paying Users
Tracks the number of users who pay for Dropbox services, indicating customer base growth and revenue generation capability.
Tracks the number of users who pay for Dropbox services, indicating customer base growth and revenue generation capability.
Data provided by:
The Fly
The FlyDropbox Earnings Call Summary
Earnings Call Date:Feb 19, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 30, 2026
Earnings Call Sentiment Neutral
Balanced/Neutral. The call highlighted strong cash generation (full‑year unlevered free cash flow > $1B), an operating margin beat, substantial share repurchases and promising early engagement signals for Dash (over half of active Dash+Dropbox users returning multiple days per week). At the same time, revenue and ARR remain pressured by the FormSwift wind‑down and other factors (Q4 revenue down ~110 bps YoY; ARR down ~190 bps YoY), gross margin faced headwinds from infrastructure and depreciation, and management expects flat revenue (ex‑FormSwift) in 2026 while investing in Dash and go‑to‑market improvements. Overall the company demonstrated financial strength and early product momentum but has not yet shown a clear, sustained return to revenue growth — hence a balanced outlook.Positive Updates
Revenue Outperformance vs. Guidance
Q4 revenue of $636 million came in above the high end of guidance; excluding the impact of the FormSwift wind down, constant currency revenue was roughly flat year‑over‑year (ex-FormSwift revenue increased ~40 basis points).
Negative Updates
Revenue and ARR Pressure (FormSwift Headwind)
Reported revenue declined 110 basis points year‑over‑year to $636 million (constant currency revenue declined 160 basis points to $633 million). FormSwift wind‑down acted as a ~150 basis point headwind; total ARR was $2.526 billion, down 190 basis points year‑over‑year (ARR excluding FormSwift down ~30 basis points).
Read all updates
Q4-2025 Updates
Positive
Negative
Revenue Outperformance vs. Guidance
Q4 revenue of $636 million came in above the high end of guidance; excluding the impact of the FormSwift wind down, constant currency revenue was roughly flat year‑over‑year (ex-FormSwift revenue increased ~40 basis points).
Read all positive updates
Company Guidance
Dropbox's guidance for 2026 called for Q1 revenue of $618–$621M (constant‑currency $610–$613M) implying ~0.4% y/y growth at the midpoint excluding FormSwift, with an ~$8M FX tailwind, non‑GAAP operating margin of ~38%, and diluted shares of 241–246M; full‑year 2026 revenue was guided to $2.485–$2.500B (constant‑currency $2.458–$2.473B) which implies roughly flat y/y growth at the midpoint excluding FormSwift, with an expected ~$27M currency tailwind, gross margin 81.5%–82%, non‑GAAP operating margin 39%–39.5%, unlevered free cash flow at or above $1.040B, cash interest (net of tax) of ~ $190M, CapEx $20–25M, finance‑lease additions ~4% of revenue, and diluted shares of 227–232M; management also expects modestly negative net new paying users in Q1 with roughly flat paying‑user growth for the rest of the year, will sunset FormSwift by year‑end, plans to draw remaining term‑loan capacity (total term loans ~$2.7B), and anticipates exhausting the remaining share‑repurchase authorization.Dropbox Financial Statement Overview
Summary
Income Statement
73
Positive
Balance Sheet
34
Negative
Cash Flow
82
Very Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 2.52B | 2.55B | 2.50B | 2.32B | 2.16B |
| Gross Profit | 2.02B | 2.10B | 2.02B | 1.88B | 1.71B |
| EBITDA | 889.90M | 623.60M | 553.50M | 513.60M | 457.10M |
| Net Income | 508.40M | 452.30M | 453.60M | 553.20M | 335.80M |
Balance Sheet | |||||
| Total Assets | 2.92B | 3.33B | 2.98B | 3.11B | 3.09B |
| Cash, Cash Equivalents and Short-Term Investments | 1.04B | 1.59B | 1.36B | 1.34B | 1.72B |
| Total Debt | 3.94B | 3.00B | 2.03B | 2.29B | 2.37B |
| Total Liabilities | 4.71B | 4.08B | 3.15B | 3.42B | 3.39B |
| Stockholders Equity | -1.80B | -752.40M | -165.80M | -309.40M | -293.90M |
Cash Flow | |||||
| Free Cash Flow | 930.80M | 871.60M | 759.10M | 762.40M | 700.90M |
| Operating Cash Flow | 951.80M | 894.10M | 783.70M | 797.30M | 729.80M |
| Investing Cash Flow | 111.90M | 443.80M | 395.20M | -48.50M | -524.80M |
| Financing Cash Flow | -1.53B | -586.60M | -799.20M | -1.04B | 16.20M |
Dropbox Technical Analysis
Negative
22.70
Price Trends
24.79
Negative
26.52
Negative
27.66
Negative
Market Momentum
-0.64
Positive
35.65
Neutral
62.46
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DBX, the sentiment is Negative. The current price of 22.7 is below the 20-day moving average (MA) of 24.04, below the 50-day MA of 24.79, and below the 200-day MA of 27.66, indicating a bearish trend. The MACD of -0.64 indicates Positive momentum. The RSI at 35.65 is Neutral, neither overbought nor oversold. The STOCH value of 62.46 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DBX.
Dropbox Risk Analysis
Dropbox disclosed 54 risk factors in its most recent earnings report. Dropbox reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Dropbox Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $3.21B | 35.80 | 115.65% | ― | 7.21% | 58.61% | |
65 Neutral | $8.22B | 42.89 | -214.15% | ― | 14.20% | 204.86% | |
62 Neutral | $16.81B | 28.07 | 9.64% | ― | 4.21% | -0.63% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
60 Neutral | $5.29B | 14.67 | -35.62% | ― | -0.44% | 2.47% | |
54 Neutral | $2.68B | ― | -27.04% | ― | 11.37% | -34.44% |
* Technology Sector Average
DBX
Dropbox
22.70
-4.38
-16.17%
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Dropbox Corporate Events
Business Operations and StrategyStock BuybackFinancial Disclosures
Dropbox Posts Profitability Gains Despite Slight Revenue Decline
Positive
Feb 19, 2026
On February 19, 2026, Dropbox reported fourth-quarter and full-year 2025 results, showing revenue declines of 1.1% for both periods to $636.2 million and $2.521 billion, respectively, with modest underlying growth when excluding its FormSwift busi...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.