Dropbox (DBX) AI Stock Analysis

• Market Cap: $7.92B
• Dividend Yield: N/A
• Average Volume (3M): 3.33M
• Price to Earnings (P/E): 18.5
• Beta (1Y): 0.75
• Revenue Growth: 0.79%
• EPS Growth: 0.59%
• Country: US
• Employees: 2,204
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 0.70
• Shares Outstanding: 204,571,030
• 10 Day Avg. Volume: 3,777,661
• 30 Day Avg. Volume: 3,326,723
• PEG Ratio: 0.19
• Price to Book (P/B): -26.13
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 10.60
• Enterprise Value/Market Cap: 1.28
• Enterprise Value/Revenue: 1.00
• Enterprise Value/Gross Profit: 4.86
• Enterprise Value/Ebitda: 3.95
• 1Y Price Target: $31.75
• Price Target Upside: 12.91% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 6

• Rating: 71 Outperform
• Price Target: $31.00 ▲(10.24%Upside)

Dropbox's overall score reflects solid operational performance and strategic advancements, with strong revenue growth and cash generation capabilities. However, financial stability risks due to high leverage and bearish technical indicators weigh on the score. The firm's reasonable valuation and positive earnings call outlook partially offset these concerns.

Positive Factors

Product Development

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

Profitability

Dropbox achieved a record high operating margin of 41.7%, surpassing the previous quarter's margin and analyst estimates.

Valuation

Dropbox maintains a strong profitability framework and trades at a relatively low EV/uFCF multiple compared to broader software.

Negative Factors

Competition

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

Revenue Growth

Dropbox’s revenue growth is projected to turn negative for the first time in its history, marking the weakest performance ever.

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 a range of paid plans for individuals, teams, and enterprises, which provide users with increased storage capacity, advanced collaboration tools, and enhanced security features. Key revenue streams include Dropbox Plus, Dropbox Professional, and Dropbox Business plans, each tailored to different user needs and organizational sizes. Additionally, Dropbox earns revenue through its HelloSign product, a digital signature and document workflow solution. Strategic partnerships with technology companies and integrations with popular productivity tools further enhance Dropbox's offerings and expand its user base, contributing to its revenue growth.

Dropbox Financial Statement Overview

Summary

Dropbox shows strong revenue growth and operational efficiency with a high gross profit margin of 82%. However, profitability is under slight pressure from a decreasing net profit margin. The balance sheet reveals high leverage and a negative equity position, indicating financial instability. Cash flow performance is robust, with impressive cash generation relative to profits.

Income Statement

Dropbox has shown consistent revenue growth with a notable increase from $2,154 million in 2021 to $2,548 million in TTM (Trailing-Twelve-Months). The gross profit margin is strong at 82%, indicating efficient cost management. However, the net profit margin has slightly decreased to 18.5% from 19.5% in 2024, suggesting some pressure on profitability. EBIT and EBITDA margins are robust at 20.7% and 24.9% respectively, highlighting operational efficiency.

Balance Sheet

The balance sheet reflects high leverage with a negative equity position of -$1,075 million. The debt-to-equity ratio is not meaningful as equity is negative, indicating financial instability. The return on equity calculation is not applicable due to negative equity, and the equity ratio is also negative, which is a significant risk factor.

Cash Flow

Cash flow performance is strong, with a free cash flow growth rate of -1.4% from 2024 to TTM, indicating stability. The operating cash flow to net income ratio is favorable at 1.85, and the free cash flow to net income ratio is an impressive 1.83, showing excellent cash generation capabilities relative to reported profits.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.54B	2.55B	2.50B	2.32B	2.16B	1.91B
Gross Profit	2.09B	2.10B	2.02B	1.88B	1.71B	1.50B
EBITDA	632.50M	623.60M	553.50M	513.60M	457.10M	280.50M
Net Income	470.30M	452.30M	453.60M	553.20M	335.80M	-256.30M
Balance Sheet
Total Assets	2.96B	3.33B	2.98B	3.11B	3.09B	2.39B
Cash, Cash Equivalents and Short-Term Investments	1.18B	1.59B	1.36B	1.34B	1.72B	1.12B
Total Debt	2.05B	3.00B	2.03B	2.29B	2.37B	1.12B
Total Liabilities	4.03B	4.08B	3.15B	3.42B	3.39B	2.05B
Stockholders Equity	-1.08B	-752.40M	-165.80M	-309.40M	-293.90M	333.80M
Cash Flow
Free Cash Flow	859.00M	871.60M	759.10M	762.40M	700.90M	490.50M
Operating Cash Flow	872.40M	894.10M	783.70M	797.30M	729.80M	570.80M
Investing Cash Flow	365.90M	443.80M	395.20M	-48.50M	-524.80M	-233.60M
Financing Cash Flow	-812.40M	-586.60M	-799.20M	-1.04B	16.20M	-577.70M

Dropbox Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 28.12
• 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 28.12 is below the 20-day moving average (MA) of 28.77, below the 50-day MA of 28.67, and above the 200-day MA of 28.04, indicating a neutral trend. The MACD of -0.11 indicates Positive momentum. The RSI at 43.31 is Neutral, neither overbought nor oversold. The STOCH value of 38.11 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
BOX	78 Outperform	$4.94B	26.48	152.34%	―	4.88%	80.94%
DBX	71 Outperform	$7.92B	18.48	-60.11%	―	0.79%	0.59%
DOCN	66 Neutral	$2.53B	25.53	-41.63%	―	13.21%	109.61%
AVPT	65 Neutral	$3.91B	―	-8.39%	―	21.70%	-67.95%
BAND	65 Neutral	$429.78M	―	-0.32%	―	18.51%	97.57%
CFLT	64 Neutral	$8.13B	―	-34.18%	―	24.11%	21.87%
Sector *	56 Neutral	$3.16B	4.94	-5.68%	5.95%	7.96%	-51.05%

Dropbox Corporate Events

Dropbox Stockholders Approve Key Proposals at Annual Meeting

At the 2025 Annual Meeting of Stockholders held on May 15, Dropbox‘s stockholders voted on several key proposals. All nominated directors were elected, Ernst & Young LLP was ratified as auditors, and the compensation of executive officers was approved. Stockholders decided to hold annual advisory votes on executive compensation, while a proposal to impose vesting provisions on Class B common stock did not pass.

The most recent analyst rating on (DBX) stock is a Hold with a $29.00 price target. To see the full list of analyst forecasts on Dropbox stock, see the DBX Stock Forecast page.

Dropbox Reports Q1 2025 Financial Results with Revenue Dip

On May 8, 2025, Dropbox announced its fiscal 2025 first-quarter financial results, reporting a revenue of $624.7 million, which marks a 1.0% decrease from the previous year. Despite the revenue decline, the company improved its GAAP operating margin to 29.4% and non-GAAP operating margin to 41.7%, attributed partly to a reduction in stock-based compensation. The company also highlighted its focus on enhancing the Dash user experience and introduced new features to address customer needs. The macroeconomic environment remains challenging, but Dropbox is committed to refining its execution and increasing operational efficiency to capitalize on opportunities and create shareholder value.

Dropbox Announces Departure of Chief Customer Officer

On April 11, 2025, Dropbox, Inc. announced that Eric Cox will step down as Chief Customer Officer. He will assist with the transition and remain as a non-executive employee until mid-August.