Dropbox (DBX) AI Stock Analysis

• Market Cap: $7.39B
• Dividend Yield: N/A
• Average Volume (3M): 3.38M
• Price to Earnings (P/E): 17.3
• Beta (1Y): 0.81
• Revenue Growth: -0.04%
• EPS Growth: -5.07%
• Country: US
• Employees: 2,204
• Sector: Technology
• Sector Strength: 85
• Industry: Software - Infrastructure
• EPS (TTM): 0.71
• Shares Outstanding: 185,080,500
• 10 Day Avg. Volume: 3,270,652
• 30 Day Avg. Volume: 3,381,923
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.35
• Enterprise Value/Revenue: 3.95
• Enterprise Value/Gross Profit: 4.85
• Enterprise Value/Ebitda: 13.55
• 1Y Price Target: $29.38
• Price Target Upside: 1.94% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 10

• Rating: 68 Neutral
• Price Target: $30.00 ▲(4.09% Upside)

Dropbox's overall score reflects strong technical momentum and strategic management moves, but is tempered by financial instability and declining revenue growth. The company's ability to maintain profitability and cash flow is a positive, yet the challenges in user retention and revenue decline are significant concerns.

Positive Factors

Earnings

Dropbox reported healthy second-quarter beats across all major metrics and raised full year fiscal 2025 revenue guidance in constant currency.

Product Innovation

The company's significant update to Dropbox Dash includes advanced AI tools, enhancing its appeal in generative AI innovations.

Value Proposition

Dropbox's stock may attract value investors due to its modest valuation, robust stock repurchase program, and substantial cost reduction efforts.

Negative Factors

Market Competition

Concerns on AI impact from larger vendors affecting DBX's core customer base as suite providers layer in broader capabilities and AI workflows in their packaging.

Revenue Growth

Despite strong margins, Dropbox continues to face challenges with revenue growth and fierce competition.

User Metrics

There was another decline in paying users, with the average revenue per user slightly decreasing compared to previous quarters.

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 various pricing tiers for individual users and businesses, with features that scale according to the needs of the user. Key revenue streams include monthly and annual subscription fees from its personal plans (like Dropbox Plus and Dropbox Family) and numerous business solutions (like Dropbox Business and Dropbox Enterprise). Additionally, Dropbox has established partnerships with third-party applications and services, enhancing its offerings and driving user engagement. The company also monetizes through enterprise-level services that provide advanced security and administrative controls for organizations. Overall, the combination of diverse subscription plans, partnerships, and a focus on user retention contributes significantly to Dropbox's earnings.

Dropbox Financial Statement Overview

Summary

Dropbox shows strong profitability and cash flow management, with high gross profit margins and positive free cash flow growth. However, negative revenue growth and high leverage are significant concerns, indicating financial instability.

Income Statement

Dropbox's income statement shows a mixed performance. The TTM data indicates a gross profit margin of 81.34%, which is strong and consistent with previous years. However, the net profit margin has slightly improved to 19.16% from 17.75% in the previous year, indicating better cost management. The EBIT and EBITDA margins have also shown improvement, suggesting operational efficiency. However, the revenue growth rate is negative at -34.6% in the TTM, which is a significant concern and indicates a decline in sales.

Balance Sheet

The balance sheet reveals some financial instability. Dropbox has a negative stockholders' equity, leading to a concerning debt-to-equity ratio of -1.60 in the TTM, although improved from -3.98 in the previous year. The return on equity is negative, reflecting losses in shareholder value. The equity ratio is not favorable, indicating high leverage and potential financial risk.

Cash Flow

Dropbox's cash flow statement is relatively strong. The free cash flow growth rate is positive at 3.98% in the TTM, showing good cash generation capabilities. The operating cash flow to net income ratio is 0.49, and the free cash flow to net income ratio is 0.99, indicating efficient cash conversion from earnings. These metrics suggest strong cash flow management despite other financial challenges.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.53B	2.55B	2.50B	2.32B	2.16B	1.91B
Gross Profit	2.06B	2.10B	2.02B	1.88B	1.71B	1.50B
EBITDA	738.20M	623.60M	553.50M	513.60M	457.10M	280.50M
Net Income	485.40M	452.30M	453.60M	553.20M	335.80M	-256.30M
Balance Sheet
Total Assets	2.78B	3.33B	2.98B	3.11B	3.09B	2.39B
Cash, Cash Equivalents and Short-Term Investments	954.70M	1.59B	1.36B	1.34B	1.72B	1.12B
Total Debt	3.04B	3.00B	2.03B	2.29B	2.37B	1.12B
Total Liabilities	4.08B	4.08B	3.15B	3.42B	3.39B	2.05B
Stockholders Equity	-1.31B	-752.40M	-165.80M	-309.40M	-293.90M	333.80M
Cash Flow
Free Cash Flow	892.80M	871.60M	759.10M	762.40M	700.90M	490.50M
Operating Cash Flow	902.30M	894.10M	783.70M	797.30M	729.80M	570.80M
Investing Cash Flow	315.10M	443.80M	395.20M	-48.50M	-524.80M	-233.60M
Financing Cash Flow	-973.50M	-586.60M	-799.20M	-1.04B	16.20M	-577.70M

Dropbox Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 28.82
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 Positive. The current price of 28.82 is above the 20-day moving average (MA) of 27.56, above the 50-day MA of 27.69, and above the 200-day MA of 28.47, indicating a bullish trend. The MACD of 0.31 indicates Negative momentum. The RSI at 60.74 is Neutral, neither overbought nor oversold. The STOCH value of 79.12 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DBX.

Dropbox Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BOX	77 Outperform	$4.51B	26.15	152.34%	―	6.29%	62.03%
DOCN	70 Outperform	$2.80B	24.18	-41.63%	―	13.29%	79.98%
DBX	68 Neutral	$7.39B	17.28	-60.11%	―	-0.04%	-5.07%
BAND	62 Neutral	$429.51M	―	-2.90%	―	14.51%	58.41%
AVPT	62 Neutral	$3.26B	―	-2.60%	―	24.41%	40.20%
Sector *	61 Neutral	$35.62B	7.50	-10.94%	1.87%	8.86%	-10.27%
CFLT	57 Neutral	$6.12B	―	-32.18%	―	23.02%	21.01%

Dropbox Corporate Events

Dropbox Appoints Sarah Schubach as Chief Accounting Officer

Dropbox, Inc. announced the appointment of Sarah Schubach as the Chief Accounting Officer, effective August 21, 2025. Ms. Schubach has been with the company since 2013, holding various finance leadership roles, and her new position signifies a strategic move to strengthen the company’s financial operations.

Dropbox Reports Q2 2025 Financial Results

On August 7, 2025, Dropbox announced its fiscal 2025 second-quarter financial results, reporting a revenue of $625.7 million, a 1.4% decrease year-over-year. Despite the revenue decline, Dropbox showed strong operating margins and cash flow, with GAAP operating margin at 26.9% and free cash flow at $258.5 million. The company highlighted the stability in its Core FSS business and increased customer engagement with its AI-powered Dash product, indicating confidence in its long-term growth strategy.