Dropbox (DBX) AI Stock Analysis

• Market Cap: $6.18B
• Dividend Yield: N/A
• Average Volume (3M): 4.02M
• Price to Earnings (P/E): 14.0
• Beta (1Y): 0.73
• Revenue Growth: -0.44%
• EPS Growth: 2.47%
• Country: US
• Employees: 2,204
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 0.68
• Shares Outstanding: 174,422,940
• 10 Day Avg. Volume: 4,220,647
• 30 Day Avg. Volume: 4,019,877
• PEG Ratio: 0.44
• Price to Book (P/B): -4.15
• Price to Sales (P/S): 2.96
• P/FCF Ratio: 8.01
• Enterprise Value/Market Cap: 1.31
• Enterprise Value/Revenue: 3.21
• Enterprise Value/Gross Profit: 4.01
• Enterprise Value/Ebitda: 9.78
• 1Y Price Target: $27.40
• Price Target Upside: 7.54% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 7
• EPS Forecast (FY): 3.04
• Revenue Forecast (FY): $2.50B

• Rating: 60 Neutral
• Price Target: $26.00 ▲(2.04% Upside)

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 & Profitability

Dropbox's software-centric model delivers sustainably high gross (~80%) and net (~20%) margins. Those margins reflect durable operating leverage and cost discipline, enabling consistent profitability that supports investment, R&D and shareholder returns even if top-line growth is muted.

Robust Free Cash Flow

Consistent near‑$1B free cash flow provides durable financial flexibility: it can fund product investment, service debt, and sustain buybacks. Strong cash conversion mitigates some balance sheet risk and underpins capital allocation through cycles, important given leverage levels.

Early Dash Product Traction

Early engagement metrics for Dash indicate meaningful product-market fit: frequent multi-day usage and initial enterprise deals suggest Dash can expand corporate stickiness and monetization opportunities over time, supporting long-term revenue expansion if GTM execution follows.

Negative Factors

Negative Equity & Leverage

Negative shareholders' equity signals a stretched balance sheet that distorts leverage metrics and reduces financial resilience. This increases refinancing and covenant risk, limits strategic flexibility, and makes downside scenarios more damaging if operating cash flows weaken.

Flat Revenue & User Growth

Management's guidance for flat revenue (ex‑FormSwift) and near‑term negative net adds point to persistent top‑line stagnation. Without sustained paying‑user growth, ARR expansion is constrained, limiting long‑term scalability and reducing the payoff from product investments.

Dash Monetization & Margin Headwinds

Scaling Dash trials is creating infrastructure, onboarding and depreciation costs that pressure gross margins. Delayed monetization and GTM friction mean costs may rise before revenue realization, creating a structural execution risk to margin sustainability.

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 generates revenue primarily through a subscription-based model. The company offers several tiers of service, including free and paid plans for both individual users and teams. Paid plans provide additional storage capacity, advanced collaboration features, and enhanced security options. Key revenue streams come from business subscriptions, which are a significant portion of their revenue, as organizations seek robust solutions for file sharing and collaboration. Additionally, Dropbox has established partnerships with various software providers to enhance its offerings, contributing to its earnings by integrating with tools that businesses commonly use, thereby increasing its value proposition to enterprise clients.

Dropbox Financial Statement Overview

Summary

Strong profitability and cash generation (high gross/net margins and robust free cash flow), but offset by flat-to-declining revenue trends and a materially weak balance sheet with negative equity and notable leverage, reducing financial flexibility.

Income Statement

Profitability is a clear strength: TTM (Trailing-Twelve-Months) gross margin is ~80% and net margin is ~20%, with operating profitability also solid. Margins have generally improved versus earlier years, showing good cost discipline. The key weakness is growth: revenue is essentially flat over the last several annual periods and turns sharply negative in TTM (Trailing-Twelve-Months), which raises questions about demand momentum and limits multiple expansion despite strong margins.

Balance Sheet

The balance sheet is the biggest concern. Stockholders’ equity is negative across recent periods (including TTM (Trailing-Twelve-Months)), which makes leverage harder to underwrite and results in distorted debt-to-equity and return-on-equity figures. While total assets are relatively stable, the combination of meaningful debt and negative equity reduces financial flexibility and increases risk if operating conditions weaken.

Cash Flow

Cash generation is a major positive. TTM (Trailing-Twelve-Months) operating cash flow (~$952M) and free cash flow (~$931M) are strong relative to earnings, with free cash flow tracking close to net income. Free cash flow growth in TTM (Trailing-Twelve-Months) is also very strong. A watch item is that cash flow covers only a portion of total debt, so ongoing strong cash generation is important given the balance-sheet structure.

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	689.10M	623.60M	553.50M	513.60M	457.10M
Net Income	508.40M	452.30M	453.60M	553.20M	335.80M
Balance Sheet
Total Assets	2.84B	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	2.15B	3.00B	2.03B	2.29B	2.37B
Total Liabilities	4.64B	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

• Technical Analysis Sentiment: Negative
• Last Price: 25.48
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• 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 Negative. The current price of 25.48 is above the 20-day moving average (MA) of 25.24, below the 50-day MA of 26.60, and below the 200-day MA of 28.35, indicating a neutral trend. The MACD of -0.55 indicates Negative momentum. The RSI at 49.14 is Neutral, neither overbought nor oversold. The STOCH value of 73.05 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DBX.

Dropbox Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DOCN	76 Outperform	$6.30B	27.67	―	―	14.20%	204.86%
BOX	65 Neutral	$3.26B	18.32	204.27%	―	7.21%	58.61%
AKAM	62 Neutral	$15.73B	32.13	9.17%	―	4.21%	-0.63%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
CFLT	61 Neutral	$10.97B	―	-27.72%	―	21.58%	18.88%
DBX	60 Neutral	$6.18B	14.02	―	―	-0.44%	2.47%
VRNS	54 Neutral	$3.02B	-22.64	-24.53%	―	11.37%	-34.44%

Dropbox Corporate Events

Dropbox Posts Profitability Gains Despite Slight Revenue Decline

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 business, which it is winding down. Despite slightly lower paying users and annual recurring revenue, the company delivered strong profitability, with GAAP operating margins rising to 25.5% in the quarter and 27.3% for the year, non-GAAP operating margins above 38%, robust cash generation, and $1.7 billion of share repurchases in 2025, underscoring a focus on operating discipline and shareholder returns while it invests in core file-sync-and-share and its AI-powered Dash product.

The most recent analyst rating on (DBX) stock is a Buy with a $35.00 price target. To see the full list of analyst forecasts on Dropbox stock, see the DBX Stock Forecast page.

Dropbox Announces CFO Resignation and Leadership Changes

On December 5, 2025, Dropbox announced the resignation of its Chief Financial Officer, Timothy Regan, effective December 16, 2025, after nine years with the company. Regan will continue as a non-executive employee until March 15, 2026, to ensure a smooth transition. Ross Tennenbaum, with extensive experience in finance and operations, will succeed Regan as CFO. Dropbox also appointed Eric Webster as Chief Business Officer, emphasizing the company’s focus on scaling Dropbox Dash and enhancing its core file storage services. These leadership changes are part of Dropbox’s strategy to accelerate business transformation and growth.

The most recent analyst rating on (DBX) stock is a Hold with a $31.00 price target. To see the full list of analyst forecasts on Dropbox stock, see the DBX Stock Forecast page.