Dropbox (DBX) AI Stock Analysis

• Market Cap: $7.16B
• Dividend Yield: N/A
• Average Volume (3M): 3.66M
• Price to Earnings (P/E): 16.2
• Beta (1Y): 0.82
• Revenue Growth: -0.44%
• EPS Growth: 2.47%
• Country: US
• Employees: 2,204
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 0.74
• Shares Outstanding: 174,422,940
• 10 Day Avg. Volume: 3,845,877
• 30 Day Avg. Volume: 3,661,681
• PEG Ratio: 3.12
• Price to Book (P/B): -12.70
• Price to Sales (P/S): 3.75
• P/FCF Ratio: 10.97
• Enterprise Value/Market Cap: 1.44
• Enterprise Value/Revenue: 4.09
• Enterprise Value/Gross Profit: 5.07
• Enterprise Value/Ebitda: 13.05
• 1Y Price Target: $31.00
• Price Target Upside: 7.12% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 6
• EPS Forecast (FY): 2.81
• Revenue Forecast (FY): $2.51B

• Rating: 62 Neutral
• Price Target: $29.00 ▲(0.21% Upside)

Dropbox's overall stock score reflects a balance of strong cash flow and operational efficiency against challenges like declining revenue growth and high leverage. Technical indicators show bearish momentum, while valuation remains fair. Positive earnings call developments provide some optimism, but risks persist.

Positive Factors

Cash Flow Management

Strong cash flow management indicates Dropbox's ability to efficiently convert earnings into cash, providing a cushion against financial uncertainties.

Operating Margin Improvement

Improved operating margins reflect enhanced operational efficiency, which can lead to better profitability and competitive positioning over time.

Product Enhancements

Product enhancements in Dash indicate ongoing innovation, potentially increasing user engagement and driving future growth.

Negative Factors

Revenue Decline

A decline in revenue signals challenges in maintaining sales growth, which could impact long-term financial performance if not addressed.

High Leverage

High leverage and negative equity pose risks to financial stability, potentially limiting Dropbox's ability to invest in growth opportunities.

CFO Resignation

Leadership changes, such as a CFO resignation, can create uncertainty in strategic direction and financial management, impacting investor confidence.

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

Dropbox shows strong profitability and cash flow generation, with gross profit margins consistently above 80% and a healthy net profit margin around 20%. However, the declining revenue growth rate and negative stockholders' equity pose significant risks, indicating potential financial instability.

Income Statement

Dropbox shows strong gross profit margins consistently above 80%, indicating efficient cost management. However, the TTM revenue has declined by 17.4%, which is a concern. Net profit margins are healthy at around 20%, but the declining revenue growth rate suggests potential challenges in sustaining growth.

Balance Sheet

The balance sheet reveals a negative stockholders' equity, resulting in a negative debt-to-equity ratio, which is a significant risk factor. The return on equity is also negative, indicating inefficiencies in generating returns from equity. These factors suggest financial instability and potential leverage risks.

Cash Flow

Dropbox has demonstrated strong free cash flow growth and a high free cash flow to net income ratio, indicating effective cash generation. The operating cash flow to net income ratio is below 1, suggesting some room for improvement in converting income to cash flow, but overall cash flow health is robust.

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	2.04B	2.10B	2.02B	1.88B	1.71B	1.50B
EBITDA	792.20M	623.60M	553.50M	513.60M	457.10M	280.50M
Net Income	502.50M	452.30M	453.60M	553.20M	335.80M	-256.30M
Balance Sheet
Total Assets	2.80B	3.33B	2.98B	3.11B	3.09B	2.39B
Cash, Cash Equivalents and Short-Term Investments	925.30M	1.59B	1.36B	1.34B	1.72B	1.12B
Total Debt	3.25B	3.00B	2.03B	2.29B	2.37B	1.12B
Total Liabilities	4.33B	4.08B	3.15B	3.42B	3.39B	2.05B
Stockholders Equity	-1.53B	-752.40M	-165.80M	-309.40M	-293.90M	333.80M
Cash Flow
Free Cash Flow	916.40M	871.60M	759.10M	762.40M	700.90M	490.50M
Operating Cash Flow	930.20M	894.10M	783.70M	797.30M	729.80M	570.80M
Investing Cash Flow	179.80M	443.80M	395.20M	-48.50M	-524.80M	-233.60M
Financing Cash Flow	-866.00M	-586.60M	-799.20M	-1.04B	16.20M	-577.70M

Dropbox Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 28.94
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• 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 28.94 is below the 20-day moving average (MA) of 29.12, below the 50-day MA of 29.28, and above the 200-day MA of 28.46, indicating a neutral trend. The MACD of -0.40 indicates Positive momentum. The RSI at 46.43 is Neutral, neither overbought nor oversold. The STOCH value of 43.10 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	73 Outperform	$4.07B	18.03	―	―	14.20%	204.86%
AKAM	73 Outperform	$12.62B	25.73	10.64%	―	4.21%	-0.63%
CFLT	72 Outperform	$10.58B	-33.26	-29.62%	―	21.58%	18.88%
BOX	65 Neutral	$4.30B	24.20	204.27%	―	7.21%	58.61%
DBX	62 Neutral	$7.16B	16.20	―	―	-0.44%	2.47%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
VRNS	48 Neutral	$3.91B	-32.72	-22.17%	―	11.37%	-34.44%

Dropbox Corporate Events

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.

Dropbox Reports Strong Q3 2025 Financial Results

On November 6, 2025, Dropbox announced its fiscal 2025 third-quarter financial results, highlighting a GAAP operating margin of 27.5% and a non-GAAP operating margin of 41.1%. Despite a slight year-over-year revenue decrease of 0.7% to $634.4 million, the company exceeded its revenue guidance and improved its operating margins. The launch of a self-serve version of Dash and integration with Dropbox has been positively received, contributing to enhanced customer retention and execution in its core business. The financial results reflect Dropbox’s focus on sustainable growth, with net cash provided by operating activities reaching $302.1 million and free cash flow at $293.7 million.