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Dropbox
(NASDAQ:DBX)
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Rating:65Neutral
Price Target:
$37.00
▲(26.76% Upside)
Action:Downgraded
Date:08/09/26
DBX scores as moderately attractive, led by strong profitability and cash generation but constrained by balance-sheet weakness (negative equity) and recent free-cash-flow growth volatility. Technicals are supportive with a strong uptrend, though overbought indicators raise near-term pullback risk. Valuation is reasonable (P/E 17.6), and the latest earnings call was a net positive due to raised margin and free-cash-flow guidance despite limited top-line growth.
Positive Factors
High and Durable Profitability
Dropbox's subscription business supports consistently high gross (~80%) and operating (~28%) margins, creating durable operating leverage. Strong margin structure preserves cash generation as revenue scales and funds product investment and shareholder returns over the next 2-6 months.
Negative Factors
Negative Shareholders' Equity
Persistently negative equity (~-$2.19B) constrains financial flexibility and complicates leverage metrics. Even with lower debt versus 2025, negative equity reduces cushion for downside scenarios and raises refinancing and covenant sensitivity over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
High and Durable Profitability
Dropbox's subscription business supports consistently high gross (~80%) and operating (~28%) margins, creating durable operating leverage. Strong margin structure preserves cash generation as revenue scales and funds product investment and shareholder returns over the next 2-6 months.
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
$7.26B
Dividend YieldN/A
Average Volume (3M)3.60M
Price to Earnings (P/E)18.3
Beta (1Y)0.87
Revenue Growth-0.05%
EPS Growth9.77%
CountryUS
Employees2,113
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)1.82
Shares Outstanding142,295,010
10 Day Avg. Volume3,435,013
30 Day Avg. Volume3,602,605
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 Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$32.00Price Target Upside9.63% Upside
Rating ConsensusHold
Number of Analyst Covering6
EPS Forecast (FY)3.09
Revenue Forecast (FY)$2.51B
Dropbox Business Overview & Revenue Model
Company Description
Dropbox, Inc. engages in providing file backup, sync, and sharing solutions. Its products include Dropbox, Dropbox Reply, Dropbox Sign, Dropbox Reclaim.ai, Dropbox Dash, Dropbox DocSend, Dropbox Fax, and Dropbox Early access. It operates through t...
How the Company Makes Money
Dropbox primarily makes money through recurring subscription revenue. The company sells paid plans (typically monthly or annual) that provide customers with expanded storage, advanced sharing and collaboration controls, administrative and security...
Dropbox Earnings Call Summary
Earnings Call Date:Aug 06, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 29, 2026
Earnings Call Sentiment Positive
The call highlights steady operational progress: three consecutive quarters of paying user growth, modest revenue and ARR expansion (especially when excluding the FormSwift divestiture), strong unlevered free cash flow and disciplined capital allocation including an expanded buyback. Management also articulated a clear strategy to embed AI natively and leverage Dropbox's content platform, with early external integrations and promising initial usage. Offsets include modest overall growth rates, margin pressure from AI compute costs, higher interest expense reducing net income and near‑term ARPU headwinds driven by mix and product roll‑offs. Management raised margin and cash‑flow guidance, signaling confidence, but longer‑term upside from AI remains dependent on adoption and monetization execution.Positive Updates
Sequential Paying User Growth
Added ~96,000 paying users, bringing total to 18.19 million; third consecutive quarter of paying user growth driven by improvements in onboarding, activation and the Simple SKU.
Negative Updates
Low Absolute Growth Rates
Revenue growth remains modest (Q2 +0.9% YoY; excluding FormSwift +1.7% YoY; constant currency excluding FormSwift +0.1% YoY) and Q3 guidance implies roughly flat year‑over‑year growth at the midpoint.
Read all updates
Q2-2026 Updates
Positive
Negative
Sequential Paying User Growth
Added ~96,000 paying users, bringing total to 18.19 million; third consecutive quarter of paying user growth driven by improvements in onboarding, activation and the Simple SKU.
Read all positive updates
Company Guidance
Dropbox's guidance called for Q3 2026 revenue of $627–$630 million (ex‑FormSwift roughly flat year‑over‑year at the midpoint), or $621–$624 million on a constant‑currency basis (with an expected currency tailwind of about $6 million), non‑GAAP operating margin of ~38.5% and diluted weighted‑average shares of 223–228 million; for full‑year 2026 they guided revenue of $2.513–$2.523 billion (≈+$13.5M at the midpoint) or $2.482–$2.492 billion constant‑currency (≈$31M FX tailwind), gross margin of ~81.5%, raised non‑GAAP operating margin to 40.0–40.5% (up 50 bps, ≈+$18M at the midpoint), and raised unlevered free cash flow to at or above $1.070 billion (≈+$15M), while expecting CapEx of $20–$25M (plus finance lease lines of ~4% of revenue) and full‑year diluted shares of ~226–231 million; the update was driven by Q2 results of $631.5M revenue (ex‑FormSwift +1.7% YoY; CC +0.1%), total ARR $2.566B, 18.19M paying users (added ~96k), non‑GAAP operating margin 39.7% and unlevered FCF $283.5M.Dropbox Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
33
Negative
Cash Flow
74
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 | 2.02B | 2.02B | 2.10B | 2.02B | 1.88B | 1.71B |
| EBITDA | 861.90M | 889.90M | 623.60M | 553.50M | 513.60M | 457.10M |
| Net Income | 442.80M | 508.40M | 452.30M | 453.60M | 553.20M | 335.80M |
Balance Sheet | ||||||
| Total Assets | 2.83B | 2.92B | 3.33B | 2.98B | 3.11B | 3.09B |
| Cash, Cash Equivalents and Short-Term Investments | 1.11B | 1.04B | 1.59B | 1.36B | 1.34B | 1.72B |
| Total Debt | 3.98B | 3.94B | 3.00B | 2.03B | 2.29B | 2.37B |
| Total Liabilities | 5.01B | 4.71B | 4.08B | 3.15B | 3.42B | 3.39B |
| Stockholders Equity | -2.19B | -1.80B | -752.40M | -165.80M | -309.40M | -293.90M |
Cash Flow | ||||||
| Free Cash Flow | 957.10M | 930.80M | 871.60M | 759.10M | 762.40M | 700.90M |
| Operating Cash Flow | 980.50M | 951.80M | 894.10M | 783.70M | 797.30M | 729.80M |
| Investing Cash Flow | 149.80M | 111.90M | 443.80M | 395.20M | -48.50M | -524.80M |
| Financing Cash Flow | -828.20M | -1.53B | -586.60M | -799.20M | -1.04B | 16.20M |
Dropbox Technical Analysis
Positive
29.19
Price Trends
30.00
Positive
27.55
Positive
27.34
Positive
Market Momentum
1.30
Positive
57.16
Neutral
30.79
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 29.19 is below the 20-day moving average (MA) of 32.94, below the 50-day MA of 30.00, and above the 200-day MA of 27.34, indicating a bullish trend. The MACD of 1.30 indicates Positive momentum. The RSI at 57.16 is Neutral, neither overbought nor oversold. The STOCH value of 30.79 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 |
|---|---|---|---|---|---|---|---|
69 Neutral | $4.47B | 48.94 | 150.65% | ― | 9.55% | -50.29% | |
69 Neutral | $15.91B | 53.68 | 54.71% | ― | 21.41% | 83.31% | |
65 Neutral | $7.26B | 18.34 | -23.53% | ― | -0.05% | 9.77% | |
64 Neutral | $4.96B | -35.39 | -26.91% | ― | 15.86% | -33.39% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
61 Neutral | $17.67B | 43.30 | 8.49% | ― | 5.87% | -0.31% |
* Technology Sector Average
DBX
Dropbox
33.87
5.45
19.18%
AKAM
Akamai
115.20
39.14
51.46%
VRNS
Varonis Systems
43.72
-14.55
-24.97%
BOX
Box
32.44
0.92
2.92%
DOCN
DigitalOcean Holdings
125.25
95.04
314.60%
Dropbox Corporate Events
Business Operations and StrategyFinancial Disclosures
Dropbox posts profitable Q2 results and user growth
Positive
Aug 6, 2026
On August 6, 2026, Dropbox reported second-quarter results for the period ended June 30, 2026, posting revenue of $631.5 million, up 0.9% year over year, or 1.7% excluding FormSwift, and total annual recurring revenue of $2.566 billion, up 1.0%. T...
Business Operations and StrategyStock BuybackPrivate Placements and Financing
Dropbox Adds New Credit Facility and Buyback Program
Positive
Jun 1, 2026
On June 1, 2026, Dropbox entered into a new senior secured revolving credit and guaranty agreement that provides up to $400 million in borrowing capacity, with flexibility to increase commitments to $500 million and a maturity date of December 11,...
Business Operations and StrategyExecutive/Board ChangesShareholder Meetings
Dropbox shareholders approve governance changes and board slate
Positive
May 26, 2026
At its Annual Meeting of Stockholders held on May 21, 2026, Dropbox shareholders elected seven directors to the board to serve until the next annual meeting, reinforcing continuity in the company’s governance. Stockholders also ratified Erns...
Business Operations and StrategyExecutive/Board ChangesFinancial Disclosures
Dropbox names new co-CEO and affirms 2026 outlook
Positive
May 26, 2026
On May 21, 2026, Dropbox’s board appointed Ashraf Alkarmi, previously General Manager of Core, as co-CEO and director effective May 26, 2026, alongside co-founder and current CEO Drew Houston, who is expected to transition to executive chair...
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.