Market Overview

Analyst: The Dropbox Post-Earnings Dip Should Be Bought 'Aggressively'

Share:
Analyst: The Dropbox Post-Earnings Dip Should Be Bought 'Aggressively'

The 4-percent decline in Dropbox Inc. (NASDAQ: DBX)'s stock in reaction to its first-quarter earnings report is somewhat puzzling as the company delivered upside on "essentially every financial metric," according to Canaccord Genuity.

The Analyst

Canaccord Genuity's Richard Davis maintains a Buy rating on Dropbox with a price target lifted from $35 to $36.

The Thesis

Dropbox's first-quarter earnings showed not only "admirable progress" in adding customers but also in terms of product innovation, Davis said in a research note. More important to the bullish case is the company's path of becoming a platform leader for team content management "did not falter."

Other notable bullish items from the report include upside in revenue, operating income, free cash flow, deferred revenue, customer additions and average revenue per user, new partnership announcements expands its already strong ecosystem, and a glimpse into new products like 1 Dropbox Paper where user conversion is strong.

There were also a few bearish items to monitor, including fluctuations in ARPU quarter to quarter and some accounting changes "around useful life estimates for some data center hardware, which does not directly flow through to cash flow."

Price Action

At time of publication, shares of Dropbox were trading lower by more than 2.6 percent at $31.09.

Related Links:

Dropbox Quiet Period Expires And Analysts Speak Up

Analyst: Dropbox's 'Across-The-Board Upside' in Q1 Reinforces Bull Thesis

Latest Ratings for DBX

DateFirmActionFromTo
Oct 2019UpgradesNeutralBuy
Oct 2019AssumesBuy
Aug 2019MaintainsNeutral

View More Analyst Ratings for DBX
View the Latest Analyst Ratings

Posted-In: Canaccord Genuity Richard Davis storageAnalyst Color Price Target Top Stories Analyst Ratings Trading Ideas Best of Benzinga

 

Related Articles (DBX)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
BGNECLSADowngrades
SWKSMizuhoMaintains90.0
KEMB. Riley FBRDowngrades27.2
ROKGabelli & Co.Downgrades
SSRMB. Riley FBRUpgrades23.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

Wall Street Reacts To Nvidia's Quarter

A BUZ-Worthy ETF