Dropbox (DBX)
NASDAQ:DBX
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Dropbox
(NASDAQ:DBX)
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Rating:73Outperform
Price Target:
$30.00
▲(23.61% Upside)
Action:Reiterated
Date:05/12/26
DBX scores well primarily due to strong profitability and free-cash-flow generation, reinforced by constructive (but not fully long-term) technicals and a relatively low P/E. The biggest constraint on the score is balance-sheet risk from persistent negative equity, alongside still-muted/variable constant-currency growth and some near-term margin pressure from Dash investments.
Positive Factors
Strong cash generation
Sustained near‑billion dollar operating cash flow and large free cash flow indicate excellent cash conversion typical of mature SaaS. This durable cash engine supports reinvestment, buybacks, debt actions, and flexible capital allocation over the next 2–6 months without relying on volatile financing.
Negative Factors
Negative shareholders' equity & leverage
Persistent negative equity and material debt make leverage structurally elevated and limit financial flexibility. Even with strong cash flow, the capital structure constrains strategic options, increases refinancing or covenant risk, and weakens balance sheet resilience over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Sustained near‑billion dollar operating cash flow and large free cash flow indicate excellent cash conversion typical of mature SaaS. This durable cash engine supports reinvestment, buybacks, debt actions, and flexible capital allocation over the next 2–6 months without relying on volatile financing.
Read all positive factors
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 (DBX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.13B
Dividend YieldN/A
Average Volume (3M)3.95M
Price to Earnings (P/E)11.7
Beta (1Y)0.87
Revenue Growth-0.62%
EPS Growth20.48%
CountryUS
Employees2,204
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)1.85
Shares Outstanding149,770,720
10 Day Avg. Volume5,071,424
30 Day Avg. Volume3,948,958
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 Cap1.17
Enterprise Value/Revenue2.85
Enterprise Value/Gross Profit3.57
Enterprise Value/Ebitda8.38
Forecast
1Y Price Target
$28.28Price Target Upside16.53% Upside
Rating ConsensusHold
Number of Analyst Covering5
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 Earnings Call Summary
Earnings Call Date:May 07, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 30, 2026
Earnings Call Sentiment Positive
The call presented more positive than negative developments: the company beat revenue and operating margin guidance, materially improved cash generation (unlevered FCF +69% YoY) and grew paying users sequentially despite expectations of a decline. Early AI product (Dash) engagement and targeted retention/monetization initiatives produced measurable improvements (mobile churn down mid-single-digits; conversion up 50% among targeted basic users). Offsetting these positives are near-term margin pressure from Dash infrastructure and hardware refresh (gross margin down ~180 bps YoY), constant-currency revenue softness (-80 bps YoY) and the drag from FormSwift (~120 bps revenue headwind). Management raised full-year revenue and margin/FCF targets modestly, signaling confidence in momentum. On balance, the positives and trajectory improvements outweigh the headwinds and execution risks.Positive Updates
Revenue Beat and Growth (Excluding FormSwift)
Q1 non-GAAP revenue of $629M, up 0.8 percentage points year-over-year; revenue grew 2.0% YoY when excluding FormSwift (FormSwift acted as a ~120 bps headwind). Company exceeded the high end of guidance on revenue.
Negative Updates
FormSwift Headwind
FormSwift acted as a meaningful near-term drag: ~120 basis points headwind to revenue growth and ~100 basis points headwind to ARR growth, requiring exclusion to show stronger core trends.
Read all updates
Q1-2026 Updates
Positive
Negative
Revenue Beat and Growth (Excluding FormSwift)
Q1 non-GAAP revenue of $629M, up 0.8 percentage points year-over-year; revenue grew 2.0% YoY when excluding FormSwift (FormSwift acted as a ~120 bps headwind). Company exceeded the high end of guidance on revenue.
Read all positive updates
Company Guidance
Dropbox guided Q2 revenue of $624–627M (constant‑currency $615–618M), implying ~80 basis points y/y growth at the midpoint ex‑FormSwift with a ~$9M FX tailwind, non‑GAAP operating margin of ~38.5% and diluted shares of 226–231M; for FY2026 it raised revenue guidance by $12M to $2.497–2.512B (constant‑currency $2.47–2.485B), ex‑FormSwift roughly flat y/y at the midpoint with a ~$27M currency tailwind, expects gross margin of 81.5–82.0%, raised non‑GAAP operating margin to 39.5–40.0% (up 50bps), unlevered free cash flow at or above $1.055B, CapEx $20–25M, finance‑lease additions ≈4% of revenue, diluted shares 222–227M (assumes exhausting repurchase authorization), and expects paying users to be slightly positive for the year while ARPU trends modestly decline sequentially.Dropbox Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
34
Negative
Cash Flow
86
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.53B | 2.52B | 2.55B | 2.50B | 2.32B | 2.16B |
| Gross Profit | 2.01B | 2.02B | 2.10B | 2.02B | 1.88B | 1.71B |
| EBITDA | 858.80M | 889.90M | 623.60M | 553.50M | 513.60M | 457.10M |
| Net Income | 472.60M | 508.40M | 452.30M | 453.60M | 553.20M | 335.80M |
Balance Sheet | ||||||
| Total Assets | 3.03B | 2.92B | 3.33B | 2.98B | 3.11B | 3.09B |
| Cash, Cash Equivalents and Short-Term Investments | 1.29B | 1.04B | 1.59B | 1.36B | 1.34B | 1.72B |
| Total Debt | 1.42B | 3.94B | 3.00B | 2.03B | 2.29B | 2.37B |
| Total Liabilities | 5.04B | 4.71B | 4.08B | 3.15B | 3.42B | 3.39B |
| Stockholders Equity | -2.01B | -1.80B | -752.40M | -165.80M | -309.40M | -293.90M |
Cash Flow | ||||||
| Free Cash Flow | 980.80M | 930.80M | 871.60M | 759.10M | 762.40M | 700.90M |
| Operating Cash Flow | 1.00B | 951.80M | 894.10M | 783.70M | 797.30M | 729.80M |
| Investing Cash Flow | 143.00M | 111.90M | 443.80M | 395.20M | -48.50M | -524.80M |
| Financing Cash Flow | -906.00M | -1.53B | -586.60M | -799.20M | -1.04B | 16.20M |
Dropbox Technical Analysis
Positive
24.27
Price Trends
24.65
Positive
25.25
Positive
27.27
Positive
Market Momentum
0.87
Negative
60.44
Neutral
60.79
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DBX, the sentiment is Positive. The current price of 24.27 is below the 20-day moving average (MA) of 26.00, below the 50-day MA of 24.65, and below the 200-day MA of 27.27, indicating a bullish trend. The MACD of 0.87 indicates Negative momentum. The RSI at 60.44 is Neutral, neither overbought nor oversold. The STOCH value of 60.79 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 |
|---|---|---|---|---|---|---|---|
73 Outperform | $6.13B | 11.67 | -28.45% | ― | -0.62% | 20.48% | |
70 Outperform | $21.26B | 39.23 | 9.12% | ― | 6.15% | 0.30% | |
68 Neutral | $3.52B | 13.24 | 115.65% | ― | 7.99% | -56.61% | |
68 Neutral | $16.53B | 126.51 | 154.32% | ― | 17.61% | 119.62% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
57 Neutral | $3.52B | -16.86 | -26.10% | ― | 15.27% | -39.93% |
* Technology Sector Average
DBX
Dropbox
27.43
-1.16
-4.06%
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BOX
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25.90
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DOCN
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158.46
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466.13%
Dropbox Corporate Events
Business Operations and StrategyFinancial Disclosures
Dropbox Posts Solid Q1 2026 Profitability and Cash Flow
Positive
May 7, 2026
On May 7, 2026, Dropbox reported first-quarter 2026 results showing modest top-line growth but strong profitability and cash generation. Revenue rose 0.8% year-over-year to $629.5 million, or 2.0% excluding the FormSwift business it is winding dow...
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.