Fact based stock research
Dropbox (NasdaqGS:DBX)

US26210C1045

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Dropbox stock research in summary

dropbox.com

ANALYSIS: With an Obermatt Combined Rank of 20 (worse than 80% compared with investment alternatives), Dropbox (Application Software, USA) shares have lower financial characteristics compared with similar stocks. Shares of Dropbox are a good value (attractively priced) with a consolidated Value Rank of 87 (better than 87% of alternatives) but show below-average growth (Growth Rank of 16), and are riskily financed (Safety Rank of 13), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 20, is a sell recommendation based on Dropbox's financial characteristics. As the company Dropbox's key financial metrics exhibit good value (Obermatt Value Rank of 87) but low growth (Obermatt Growth Rank of 16) and risky financing practices (Obermatt Safety Rank of 13), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 87% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	87
Growth Rank	16
Safety Rank	13
Combined Rank	20

Country	USA
Industry	Application Software
Index	Dividends USA, Diversity USA, NASDAQ
Size class	Large

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

Why popular stocks have low ratings

It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.

Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Dropbox

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	44	100	96	87
GROWTH
GROWTH	61	73	32	16
SAFETY
SAFETY	3	75	75	13
SENTIMENT
SENTIMENT	n/a	3	55	^new
360° VIEW
360° VIEW	n/a	73	65	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Dropbox is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	44	100	96	87
GROWTH
GROWTH	61	73	32	16
SAFETY
SAFETY	3	75	75	13
COMBINED
COMBINED	16	14	14	20

Last update of combined financial performance: 4-Jul-2024. Stock analysis on combined financial performance: The higher the rank of Dropbox the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 87 (better than 87% compared with alternatives) for 2024, Dropbox shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Dropbox. Price-to-Sales (P/S) is 56, which means that the stock price compared with what market professionals expect for future sales is lower than for 56% of comparable companies, indicating a good value regarding Dropbox's revenue size. The same is valid for expected Price to Profits (or Price / Earnings, P/E), more favorable than for 86% of alternatives, and it's also true for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 94. But, compared with other companies in the same industry, dividend yields are expected to be lower than average; only 1% of all competitors have even lower dividend yields than Dropbox (a Dividend Yield Rank of 1). 99% alternative investments in the same business provide a higher dividend yield. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 87, is a buy recommendation based on Dropbox's stock price compared with the company's operational size and dividend yields. The below-average dividend yield may be a good sign, as it could mean the company has more attractive investment opportunities for the generated cash than to pay it out as dividends. A low dividend yield can also indicate a growth phase. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	59	73	52	56
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	6	90	88	86
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	98	97	100	94
DIVIDEND YIELD
DIVIDEND YIELD	1	95	92	1
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	44	100	96	87

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Dropbox; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 16 (better than 16% compared with alternatives), Dropbox shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Dropbox. Only Capital Growth has a good rank of 56, which means that currently professionals expect the company to grow its invested capital more than 32% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 12 which means that currently professionals expect the company to grow less than 88% of its competitors. Profit Growth with a rank of 32 and Stock Returns with a rank of 33 are also low (below 67% of alternative investments). ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 16, is a sell recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for Dropbox is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is limited here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	41	11	17	12
PROFIT GROWTH
PROFIT GROWTH	n/a	67	34	32
CAPITAL GROWTH
CAPITAL GROWTH	n/a	76	67	56
STOCK RETURNS
STOCK RETURNS	72	79	57	33
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	61	73	32	16

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Dropbox.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 13 (better than 13% compared with alternatives), the company Dropbox has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Dropbox is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Dropbox. Liquidity is at 97, meaning the company generates more profit to service its debt than 97% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 13, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 87% of its competitors. Leverage is also high at a rank of 3, which means that the company has an above-average debt-to-equity ratio. It has more debt than 97% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 13 (worse than 87% compared with alternatives), Dropbox has a financing structure that is significantly riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	14	25	2	3
REFINANCING
REFINANCING	18	59	19	13
LIQUIDITY
LIQUIDITY	35	94	94	97
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	3	75	75	13

Last update of Safety Rank: 4-Jul-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Dropbox and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	18	36	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	33	94	^new
MARKET PULSE
MARKET PULSE	n/a	20	33	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	3	55	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Dropbox.
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