Dropbox (DBX.O) said on Tuesday that around 5,000 accounts were compromised last month, with hackers viewing and downloading content stored on the cloud-storage platform.
Here are a few details:
Some Dropbox users received an email from the company on Monday notifying them that their accounts have been accessed without authorization between August 4 and August 21, Dropbox confirmed after Bloomberg News reported the hack earlier in the day.
Hackers accessed files in fewer than a third of the compromised accounts, the company said.
Shares of Dropbox fell around 2.4% in extended trading on Tuesday.
Dropbox told Reuters that it identified unauthorized access affecting accounts linked to a Lenovo ID that did not have its two-factor authentication enabled, prompting the company to terminate all sessions authenticated through a Lenovo ID.
The company has removed any links between Lenovo IDs and Dropbox accounts and changed its systems so that users must enter their Dropbox password before accessing an account through Lenovo.
Dropbox said it had reported the incident to data protection regulators.
Lenovo identified a "legacy integration" between Lenovo ID and Dropbox that "could be used to improperly authenticate certain Dropbox accounts". The company said its own customers were not affected and that an investigation was ongoing.
Sarah Elizabeth Schubach, chief accounting officer at Dropbox, Inc. (DBX +1.38%), disposed of 5,854 shares of Class A Common Stock on August 17, according to an SEC Form 4 filing.
Transaction summaryMetricValueShares sold5,854Transaction value$201,500Post-transaction shares (directly held)118,412Post-transaction value$4.0 millionTransaction value based on SEC Form 4 weighted average sale price ($34.42); post-transaction value based on the August 17 market close ($33.38).
Key questionsWhat was the primary driver behind this transaction?
The transaction was non-discretionary, executed to cover tax obligations resulting from the vesting and net settlement of restricted stock units, and does not reflect the insider's personal assessment of the stock's valuation.What is the insider's remaining equity exposure?
Following the disposition, Schubach maintains a direct position of about 118,000 shares and holds additional restricted stock units that are scheduled to vest through February 15, 2030.What is the current insider ownership level at the company?
Schubach still holds roughly 0.05% of the shares outstanding as of the August 18 market close.How does the current stock price compare to the transaction level?
The shares were priced at $33.87 as of the August 18 market close, which is 1.6% lower than the $34.42 weighted average execution price from the August 17 transaction.Company OverviewMetricValueShare Price (as of market close 2026-08-18)$33.87Market Capitalization$8.6 billionRevenue (TTM)$2.5 billionNet Income (TTM)$442.8 millionCompany SnapshotDropbox provides a comprehensive suite of file management and collaboration solutions, including the Dropbox core platform, Dropbox Sign, Dropbox Dash, DocSend, and Reclaim.ai, generating revenue primarily through subscription-based services across consumer and enterprise segments.The company operates a software-as-a-service (SaaS) business model, monetizing its platform through tiered subscription plans for individual users, teams, and enterprises, supplemented by advanced features and integrations that drive incremental revenue.Dropbox serves a diverse customer base spanning individual consumers, small and medium-sized businesses, and large enterprises across the United States and international markets, with particular strength in knowledge worker segments requiring file synchronization and secure document collaboration.Dropbox, Inc. is a leading cloud content management platform with a market capitalization of $8.6 billion and TTM revenue of $2.5 billion, demonstrating strong profitability with TTM net income of $442.8 million. The company maintains a global presence with 2,113 employees and operates dual business segments across the United States and International markets. Dropbox's competitive positioning is anchored by its integrated ecosystem of complementary products--including signing, fax, and AI-powered document management capabilities--which enhance customer retention and drive cross-selling opportunities within its enterprise customer base.
What this transaction means for investorsSchubach gave up the smallest block of the six Dropbox insiders whose shares were withheld on Aug. 17, and she owns the smallest position of the group by a wide margin, roughly 118,000 shares against the co-CEO's million-plus.
Still, her job connects to the number investors are actually pricing, and Dropbox is paying its people in the same stock it spends heavily to retire through buybacks: The company repurchased 12.6 million shares for about $315 million in the second quarter, authorized another $900 million, and still has roughly $1.385 billion available. Unlevered free cash flow per share climbed 25% to $1.25 while revenue rose 0.9%, showcasing the impact of fewer shares outstanding. Management expects 226 million to 231 million diluted shares for the year, and CFO Ross Tennenbaum told analysts on the latest earnings call that the increase comes from "an increase in our 30-day trailing average share price." How that number evolves will be important for long-term investors.
Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Dropbox. The Motley Fool has a disclosure policy.
The disposition of 30,650 shares realized a total value of $1 million based on weighted average execution prices. The transactions reduced the insider's direct equity holdings by 7%.
William T. Yoon, chief legal officer of Dropbox, Inc. (DBX +1.38%), reported a non-discretionary disposition of 16,833 shares of Class A Common Stock on August 17, according to an SEC Form 4 filing.
Transaction summaryMetricValueTransaction value$579,000Shares sold16,833Post-transaction shares (directly held)350,130Post-transaction value$11.7 millionTransaction value based on SEC Form 4 weighted average sale price ($34.42); post-transaction value based on the August 17 market close ($33.38).
Key questionsWhat initiated this disposition?
The transaction was a non-discretionary execution where shares were withheld by the company to cover tax remittance requirements triggered by the vesting of restricted stock units.What is the current scale of the executive's direct equity position?
William T. Yoon maintains direct ownership of 350,130 shares, representing a market value of $11.69 million as of the August 17 market close.What further equity incentives remain in place?
The executive continues to hold restricted stock units that are scheduled to vest through February 15, 2030, which ensures a continued economic interest in the company's performance.Company OverviewMetricValueShare Price (as of market close 2026-08-18)$33.87Market Capitalization$8.6 billionRevenue (TTM)$2.5 billionNet Income (TTM)$442.8 millionCompany SnapshotDropbox provides a comprehensive suite of file management and collaboration solutions, including the Dropbox core platform, Dropbox Sign, Dropbox Dash, DocSend, and Reclaim.ai, generating revenue primarily through subscription-based services across consumer and enterprise segments.The company operates a software-as-a-service (SaaS) business model, monetizing its platform through tiered subscription plans for individual users, teams, and enterprises, supplemented by advanced features and integrations that drive incremental revenue.Dropbox serves a diverse customer base spanning individual consumers, small and medium-sized businesses, and large enterprises across the United States and international markets, with particular strength in knowledge worker segments requiring file synchronization and secure document collaboration.Dropbox, Inc. is a leading cloud content management platform with a market capitalization of $8.6 billion and TTM revenue of $2.5 billion, demonstrating strong profitability with TTM net income of $442.8 million. The company maintains a global presence with 2,113 employees and operates dual business segments across the United States and International markets. Dropbox's competitive positioning is anchored by its integrated ecosystem of complementary products--including signing, fax, and AI-powered document management capabilities--which enhance customer retention and drive cross-selling opportunities within its enterprise customer base.
What this transaction means for investorsYoon gave up 16,833 shares to tax withholding on a vesting date, which is a very routine transaction that doesn't offer investors much context into how the stock may or may not be doing.
Instead, it's worth peeking under the hood to see how Dropbox's story has evolved from a growth story into a much steadier one. Most recently, revenue rose 0.9% in the second quarter and 0.1% after adjusting for currency and the FormSwift wind-down. Meanwhile, unlevered free cash flow per share climbed 25% to $1.25, largely because the diluted share count fell from 276.7 million to 226.8 million over the year. Full-year unlevered free cash flow is guided to at least $1.070 billion, and CFO Ross Tennenbaum was clear on the company's ambitions, telling analysts the objective is "to compound free cash flow per share over the long term." With revenue effectively flat for now, how much stock the company retires from here matters more than what any single insider does with theirs.
Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Dropbox. The Motley Fool has a disclosure policy.
The transaction involved 47,865 shares withheld at $34.42 per share, representing a total value of about $1.6 million. This disposition reduced the executive's direct equity holdings by 4%.
Ali Dasdan, the chief technology officer of Dropbox, Inc. (DBX +1.38%), disposed of 30,587 shares of Class A Common Stock on August 17 and August 18, according to an SEC Form 4 filing.
Transaction summaryMetricValueShares sold30,587Transaction value~$1.0 millionPost-transaction shares (directly held)471,052Post-transaction value~$15.95 millionTransaction value based on SEC Form 4 weighted average sale price ($34.31); post-transaction value based on the August 18 market close ($33.87).
Key questionsWhat was the nature of the share disposition?
The activity was comprised of 19,255 shares withheld for tax purposes and 11,332 shares sold through a pre-scheduled trading plan. The withholding was a non-discretionary transaction triggered by the vesting of equity awards and does not reflect the insider's view on the stock.How has this impacted the insider's total equity position?
Following the disposition, Dasdan holds 471,052 shares directly, which is a 6% decrease from his previous position of 501,639 shares. His remaining direct equity interest represents approximately 0.2% of the company.What are the terms of the trading plan used for this transaction?
The sale component was carried out under a Rule 10b5-1 plan that Dasdan adopted on May 12, 2025. These plans allow insiders to establish a pre-determined schedule for selling shares to satisfy liquidity or diversification needs while operating within regulatory compliance.What is the current valuation and composition of the remaining holdings?
The insider's remaining direct shares are valued at about $15.95 million based on the August 18 market close. According to the filing, these holdings include restricted stock units that are scheduled to continue vesting through November 15, 2030, provided the insider remains with the company.Company OverviewMetricValueShare Price (as of market close 2026-08-18)$33.87Market Capitalization$8.6 billionRevenue (TTM)$2.5 billionNet Income (TTM)$442.8 millionCompany SnapshotDropbox provides a comprehensive suite of file management and collaboration solutions, including Dropbox, Dropbox Sign, Dropbox Dash, and Dropbox Reclaim.ai, which generate revenue through subscription-based licensing models across enterprise and consumer segments.The company operates a software-as-a-service (SaaS) business model, monetizing its platform through tiered subscription offerings that provide file backup, synchronization, sharing, and document management capabilities to organizations and individual users.Dropbox serves a diverse customer base spanning individual consumers, small and medium-sized businesses, and large enterprises across the United States and international markets, with particular strength in knowledge worker and professional services segments.Dropbox is a leading cloud content collaboration platform with a $8.6 billion market capitalization and TTM revenues of $2.5 billion, demonstrating strong profitability with TTM net income of $442.8 million. The company maintains a competitive advantage through its integrated ecosystem of complementary products, including digital signature, AI-powered search, and document management capabilities, which drive customer retention and expand wallet share. Operating from San Francisco and employing approximately 2,113 employees, Dropbox continues to execute a platform expansion strategy to deepen customer engagement and capture additional use cases in the enterprise collaboration market.
What this transaction means for investorsDasdan has been selling on a schedule he locked in back in May 2025, and this batch left him with 471,052 shares, so the trade itself seems largely negligible. More importantly, Dasdan oversees the team overseeing the AI buildout that's eating away at Dropbox's margins, with gross margin already slipping to 81.6% in the second quarter, down about 60 basis points on compute costs from pushing AI features into the product.
Ross Tennenbaum, the CFO, told analysts the efficiency gains from that team are the counterweight to rising AI costs, and he pushed back on the idea that margins keep sliding. "I just don't want people to assume that it has to keep going down," he said on the Aug. 6 call. An important test will come in the back half of the year, when Dropbox extends the Dash AI tools to most of its Teams customers. Full-year gross margin is guided to roughly 81.5%, which implies it runs below the second quarter's level from here. Capital spending won't telegraph the answer either, since the company budgeted only $20 million to $25 million for the year and routes infrastructure through finance leases running near 4% of revenue.
Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Dropbox. The Motley Fool has a disclosure policy.
Ross Tennenbaum, the chief financial officer of Dropbox, Inc. (DBX +1.38%), reported a disposition of 20,326 shares of Class A Common Stock on August 17, according to an SEC Form 4 filing.
Transaction summaryMetricValueTransaction value$699,621Shares sold20,326Post-transaction shares (directly held)759,279Post-transaction value$25.34 millionTransaction value based on SEC Form 4 weighted average sale price ($34.42); post-transaction value based on the August 17 market close ($33.38).
Key questionsDoes this transaction reflect the CFO's current outlook on the company?
The disposition was a non-discretionary event executed for tax purposes and does not indicate a shift in the insider's assessment of the company's valuation.What is the extent of the insider's remaining direct equity exposure?
Ross Tennenbaum continues to hold 759,000 shares directly, which were valued at $25.7 million based on the $33.87 share price at the August 18 market close.What are the terms of the remaining equity awards?
The reporting owner holds restricted stock units that are scheduled to continue vesting through November 15, 2029, contingent upon continued service as a provider to the company.Company OverviewMetricValueShare Price (as of market close 2026-08-18)$33.87Market Capitalization$8.6 billionRevenue (TTM)$2.5 billionNet Income (TTM)$442.8 millionCompany SnapshotDropbox provides a comprehensive suite of file management and collaboration solutions, including the Dropbox core platform, Dropbox Sign, Dropbox Dash, DocSend, and Reclaim.ai, generating revenue primarily through subscription-based services across consumer and enterprise segments.The company operates a software-as-a-service (SaaS) business model, monetizing its platform through tiered subscription plans for individual users, teams, and enterprises, supplemented by advanced features and integrations that drive incremental revenue.Dropbox serves a diverse customer base spanning individual consumers, small and medium-sized businesses, and large enterprises across the United States and international markets, with particular strength in knowledge worker segments requiring file synchronization and secure document collaboration.Dropbox, Inc. is a leading cloud content management platform with a market capitalization of $8.6 billion and TTM revenue of $2.5 billion, demonstrating strong profitability with TTM net income of $442.8 million. The company maintains a global presence with 2,113 employees and operates dual business segments across the United States and International markets. Dropbox's competitive positioning is anchored by its integrated ecosystem of complementary products--including signing, fax, and AI-powered document management capabilities--which enhance customer retention and drive cross-selling opportunities within its enterprise customer base.
What this transaction means for investorsInvestors shouldn't spend too much time looking at this filing; instead, it's more important to follow what Tennanbaum's been saying as CFO. Tennenbaum raised Dropbox's full-year outlook on Dropbox's latest earnings call, lifting full-year operating margin guidance by 50 basis points to a range of 40% to 40.5%, and unlevered free cash flow guidance by $15 million. Revenue guidance moved up $13.5 million at the midpoint. So almost all of the improvement came out of the expense line rather than demand, and he named the sources, R&D efficiencies as the Dash team folds into Dropbox, plus a rebalancing of the go-to-market organization toward priority markets and segments. "We won't scale investment because an opportunity is exciting," Tennenbaum told analysts.
That's a defensible way to run a turnaround, though reshuffling sales coverage is an interesting companion to proving three quarters of paying-user growth will hold, especially with ARPU projected to slip modestly each quarter through year-end. Third-quarter revenue guidance of $627 million to $630 million implies roughly flat year-over-year growth once FormSwift launches, leaving the user streak carrying the full-year number.
Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Dropbox. The Motley Fool has a disclosure policy.
There’s a big difference between a bad company and a bad stock. Sometimes a perfectly good company just doesn’t have the earnings momentum you want to see. That distinction becomes even more important when the broader market gets picky. You don’t necessarily need a business to fall apart for the stock to underperform. Sometimes, slowing growth and a lack of positive earnings revisions are enough.
That brings us to today’s Bear of the Day, Dropbox ((DBX - Free Report) ). Dropbox operates a cloud-based platform that allows individuals and businesses to store, organize, access and share digital content. The company has more than 700 million registered users around the world, making Dropbox one of the most recognizable names in file storage and collaboration.
Here’s where things get interesting. Dropbox actually delivered a decent second quarter. Adjusted earnings came in at 75 cents per share versus the Zacks Consensus Estimate of 74 cents, while revenue increased 0.9% year over year to $631.5 million. Paying users increased by roughly 96,000 sequentially, marking the third consecutive quarter of user growth. Management even raised its full-year operating-margin and unlevered free-cash-flow outlooks.
So why the bearish stance? Growth remains the problem.
Even after that better-than-expected quarter, Dropbox expects 2026 revenue of just $2.513 billion to $2.523 billion. That's basically a flat-growth business at this point. It’s caused two analysts to cut expectations for the current year and three to do so for next year. Our Zacks Consensus Estimate has gone from $3.08 to $3.04 as a result for this year, with next year’s number down from $3.47 to $3.27. That’s the reason why the stock is a Zacks Rank #5 (Strong Sell) right now. Too many analysts dropping their numbers on the stock.
Dropbox is in the Internet – Services industry which ranks in the Bottom 30% of our Zacks Industry Rank. There are a couple of stocks in the industry that are in the good graces of our Zacks Rank. This includes Zacks Rank #2 (Buy) Inuvo ((INUV - Free Report) ) and Sprout Social ((SPT - Free Report) ).
For new and old investors, taking full advantage of the stock market and investing with confidence are common goals. Zacks Premium provides lots of different ways to do both.
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Zacks Premium also includes the Zacks Style Scores.
What are the Zacks Style Scores? The Zacks Style Scores is a unique set of guidelines that rates stocks based on three popular investing types, and were developed as complementary indicators for the Zacks Rank. This combination helps investors choose securities with the highest chances of beating the market over the next 30 days.
Based on their value, growth, and momentum characteristics, each stock is assigned a rating of A, B, C, D, or F. The better the score, the better chance the stock will outperform; an A is better than a B, a B is better than a C, and so on.
The Style Scores are broken down into four categories:
Value ScoreFor value investors, it's all about finding good stocks at good prices, and discovering which companies are trading under their true value before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to help pick out the most attractive and discounted stocks.
Growth ScoreGrowth investors, on the other hand, are more concerned with a company's financial strength and health, and its future outlook. The Growth Style Score examines things like projected and historic earnings, sales, and cash flow to find stocks that will experience sustainable growth over time.
Momentum ScoreMomentum trading is all about taking advantage of upward or downward trends in a stock's price or earnings outlook, and these investors live by the saying "the trend is your friend." The Momentum Style Score can pinpoint good times to build a position in a stock, using factors like one-week price change and the monthly percentage change in earnings estimates.
VGM ScoreIf you like to use all three kinds of investing, then the VGM Score is for you. It's a combination of all Style Scores, and is an important indicator to use with the Zacks Rank. The VGM Score rates each stock on their shared weighted styles, narrowing down the companies with the most attractive value, best growth forecast, and most promising momentum.
How Style Scores Work with the Zacks Rank The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.
It's highly successful, with #1 (Strong Buy) stocks producing an unmatched +23.94% average annual return since 1988. That's more than double the S&P 500. But because of the large number of stocks we rate, there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
But it can feel overwhelming to pick the right stocks for you and your investing goals with over 800 top-rated stocks to choose from.
That's where the Style Scores come in.
To maximize your returns, you want to buy stocks with the highest probability of success. This means picking stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you find yourself looking at stocks with a #3 (Hold) rank, make sure they have Scores of A or B as well to ensure as much upside potential as possible.
Since the Scores were created to work together with the Zacks Rank, the direction of a stock's earnings estimate revisions should be a key factor when choosing which stocks to buy.
Here's an example: a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one with Style Scores of A and B, still has a downward-trending earnings outlook, and a bigger chance its share price will decrease too.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Dropbox (DBX - Free Report) Dropbox offers a cloud-based platform that businesses and individuals can create, access and share digital content globally. It serves more than 700 million registered users across approximately 180 countries.
DBX is a #3 (Hold) on the Zacks Rank, with a VGM Score of B.
Additionally, the company could be a top pick for growth investors. DBX has a Growth Style Score of B, forecasting year-over-year earnings growth of 9.2% for the current fiscal year.
For fiscal 2026, one analyst revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.02 to $3.10 per share. DBX boasts an average earnings surprise of +6.8%.
With a solid Zacks Rank and top-tier Growth and VGM Style Scores, DBX should be on investors' short list.
Shares of Dropbox, Inc. (NASDAQ:DBX – Get Free Report) have received an average recommendation of “Reduce” from the seven ratings firms that are currently covering the company, Marketbeat reports. Two research analysts have rated the stock with a sell recommendation, four have issued a hold recommendation and one has given a buy recommendation to the company. The average 1-year price objective among brokers that have covered the stock in the last year is $28.25.
A number of research firms recently issued reports on DBX. Wall Street Zen downgraded Dropbox from a “buy” rating to a “hold” rating in a research report on Saturday, August 8th. William Blair upgraded Dropbox from an “underperform” rating to a “market perform” rating in a research note on Friday, August 7th. Royal Bank Of Canada reissued an “outperform” rating on shares of Dropbox in a report on Monday, June 1st. Weiss Ratings raised shares of Dropbox from a “hold (c)” rating to a “hold (c+)” rating in a research note on Thursday. Finally, Bank of America restated an “underperform” rating on shares of Dropbox in a research note on Friday, August 7th.
Check Out Our Latest Research Report on Dropbox
Insiders Place Their Bets In other Dropbox news, CAO Sarah Elizabeth Schubach sold 1,632 shares of the company’s stock in a transaction that occurred on Friday, July 31st. The stock was sold at an average price of $31.61, for a total value of $51,587.52. Following the sale, the chief accounting officer owned 124,266 shares in the company, valued at $3,928,048.26. This represents a 1.30% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Karen Peacock sold 2,000 shares of Dropbox stock in a transaction that occurred on Wednesday, July 29th. The stock was sold at an average price of $33.00, for a total value of $66,000.00. Following the transaction, the director owned 22,366 shares of the company’s stock, valued at $738,078. This represents a 8.21% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 33,554 shares of company stock valued at $951,367 over the last 90 days. 35.48% of the stock is currently owned by insiders.
Hedge Funds Weigh In On Dropbox Several institutional investors and hedge funds have recently modified their holdings of the stock. Norges Bank bought a new stake in shares of Dropbox during the 4th quarter valued at $69,909,000. Arrowstreet Capital Limited Partnership raised its stake in Dropbox by 12.7% in the first quarter. Arrowstreet Capital Limited Partnership now owns 8,533,736 shares of the company’s stock valued at $193,886,000 after purchasing an additional 960,109 shares in the last quarter. Arbejdsmarkedets Tillaegspension bought a new stake in Dropbox during the fourth quarter worth about $22,050,000. Wedge Capital Management L L P NC lifted its position in Dropbox by 26.4% during the second quarter. Wedge Capital Management L L P NC now owns 3,005,173 shares of the company’s stock worth $82,552,000 after purchasing an additional 627,111 shares during the period. Finally, Allianz Asset Management GmbH grew its stake in Dropbox by 28.1% during the fourth quarter. Allianz Asset Management GmbH now owns 2,720,372 shares of the company’s stock worth $75,626,000 after buying an additional 596,440 shares in the last quarter. 94.84% of the stock is currently owned by institutional investors and hedge funds.
Dropbox Price Performance NASDAQ DBX opened at $34.42 on Friday. The firm’s 50 day moving average is $29.75 and its 200-day moving average is $26.76. The company has a market capitalization of $7.77 billion, a PE ratio of 19.12, a price-to-earnings-growth ratio of 4.70 and a beta of 0.64. Dropbox has a 12-month low of $21.69 and a 12-month high of $36.30.
Dropbox (NASDAQ:DBX – Get Free Report) last released its earnings results on Thursday, August 6th. The company reported $0.75 earnings per share for the quarter, beating analysts’ consensus estimates of $0.74 by $0.01. Dropbox had a net margin of 17.49% and a negative return on equity of 24.26%. The business had revenue of $631.50 million during the quarter, compared to the consensus estimate of $626.69 million. During the same quarter last year, the firm earned $0.71 earnings per share. The firm’s revenue for the quarter was up .9% compared to the same quarter last year. As a group, sell-side analysts expect that Dropbox will post 2.09 EPS for the current year.
About Dropbox (Get Free Report)
Dropbox, Inc (NASDAQ: DBX) is a leading provider of cloud-based file storage, collaboration, and productivity tools. Founded in 2007 and headquartered in San Francisco, California, the company offers a suite of services designed to help individuals and organizations securely store, share, and manage digital content. Dropbox has grown from a simple file-syncing application into an integrated collaboration platform used by millions of customers around the globe.
At its core, Dropbox provides cloud storage plans tailored for consumers and businesses.
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Ashraf Alkarmi said he'll skip meetings outside his core priorities. Richard Drury/Getty Images It can be hard to stay focused on your priorities when constant pings and competing projects are pulling you in different directions.
That's why Dropbox co-CEO Ashraf Alkarmi developed a simple system for keeping his biggest priorities front and center. His most basic productivity hack is to identify five things he needs to accomplish each quarter, and use it as his North Star of where he spends his time.
"I pick things that I can make significant progress on in that quarter," Alkarmi said. "And so it becomes a filter for how I prioritize my time."
He shares those five priority areas with his team, administration, and chief of staff so everyone understands where he's spending his time. Those priorities guide how he structures his weeks and decides where to devote his attention. As he put it, the five priorities "win at all times," even when competing demands arise.
Alkarmi held leadership roles at Vimeo and Meta before he joined Dropbox in 2024. He became co-CEO in May, alongside Dropbox founder Drew Houston, and will eventually become the company's sole CEO.
Alkarmi said that when he joined Dropbox, he faced a wide range of tasks across various business categories. He narrowed his priorities to five key areas, including people, the business, and performance.
On the business side, Alkarmi said he looked at data and identified reducing customer churn as a key priority, with the goal of making "meaningful progress" in the first quarter. He said he uses work management tool Trello to manage his top five priorities.
The list doesn't just help Alkarmi decide where to spend his time. It also helps him determine what isn't worth his attention.
"Sometimes I get meetings that are not related to these things, and I don't go," Alkarmi said.
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Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both.
Featuring daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, the research service can help you become a smarter, more self-assured investor.
Zacks Premium also includes the Zacks Style Scores.
What are the Zacks Style Scores? The Zacks Style Scores is a unique set of guidelines that rates stocks based on three popular investing types, and were developed as complementary indicators for the Zacks Rank. This combination helps investors choose securities with the highest chances of beating the market over the next 30 days.
Based on their value, growth, and momentum characteristics, each stock is assigned a rating of A, B, C, D, or F. The better the score, the better chance the stock will outperform; an A is better than a B, a B is better than a C, and so on.
The Style Scores are broken down into four categories:
Value ScoreFor value investors, it's all about finding good stocks at good prices, and discovering which companies are trading under their true value before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to help pick out the most attractive and discounted stocks.
Growth ScoreGrowth investors are more concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, the Growth Style Score analyzes characteristics like projected and historic earnings, sales, and cash flow to find stocks that will see sustainable growth over time.
Momentum ScoreMomentum investors, who live by the saying "the trend is your friend," are most interested in taking advantage of upward or downward trends in a stock's price or earnings outlook. Utilizing one-week price change and the monthly percentage change in earnings estimates, among other factors, the Momentum Style Score can help determine favorable times to buy high-momentum stocks.
VGM ScoreIf you like to use all three kinds of investing, then the VGM Score is for you. It's a combination of all Style Scores, and is an important indicator to use with the Zacks Rank. The VGM Score rates each stock on their shared weighted styles, narrowing down the companies with the most attractive value, best growth forecast, and most promising momentum.
How Style Scores Work with the Zacks Rank A proprietary stock-rating model, the Zacks Rank utilizes the power of earnings estimate revisions, or changes to a company's earnings outlook, to help investors create a successful portfolio.
#1 (Strong Buy) stocks have produced an unmatched +23.94% average annual return since 1988, which is more than double the S&P 500's performance over the same time frame. However, the Zacks Rank examines a ton of stocks, and there can be more than 200 companies with a Strong Buy rank, and another 600 with a #2 (Buy) rank, on any given day.
With more than 800 top-rated stocks to choose from, it can certainly feel overwhelming to pick the ones that are right for you and your investing journey.
That's where the Style Scores come in.
To have the best chance of big returns, you'll want to always consider stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B, which will give you the highest probability of success. If you're looking at stocks with a #3 (Hold) rank, it's important they have Scores of A or B as well to ensure as much upside potential as possible.
The direction of a stock's earnings estimate revisions should always be a key factor when choosing which stocks to buy, since the Scores were created to work together with the Zacks Rank.
Here's an example: a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one with Style Scores of A and B, still has a downward-trending earnings outlook, and a bigger chance its share price will decrease too.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Dropbox (DBX - Free Report) Dropbox offers a cloud-based platform that businesses and individuals can create, access and share digital content globally. It serves more than 700 million registered users across approximately 180 countries.
DBX is a #3 (Hold) on the Zacks Rank, with a VGM Score of B.
Momentum investors should take note of this Computer and Technology stock. DBX has a Momentum Style Score of B, and shares are up 18% over the past four weeks.
One analyst revised their earnings estimate upwards in the last 60 days for fiscal 2026. The Zacks Consensus Estimate has increased $0.02 to $3.10 per share. DBX boasts an average earnings surprise of +6.8%.
With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, DBX should be on investors' short list.
Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both.
The research service features daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, all of which will help you become a smarter, more confident investor.
It also includes access to the Zacks Style Scores.
What are the Zacks Style Scores? The Zacks Style Scores, developed alongside the Zacks Rank, are complementary indicators that rate stocks based on three widely-followed investing methodologies; they also help investors pick stocks with the best chances of beating the market over the next 30 days.
Based on their value, growth, and momentum characteristics, each stock is assigned a rating of A, B, C, D, or F. The better the score, the better chance the stock will outperform; an A is better than a B, a B is better than a C, and so on.
The Style Scores are broken down into four categories:
Value ScoreFor value investors, it's all about finding good stocks at good prices, and discovering which companies are trading under their true value before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to help pick out the most attractive and discounted stocks.
Growth ScoreGrowth investors, on the other hand, are more concerned with a company's financial strength and health, and its future outlook. The Growth Style Score examines things like projected and historic earnings, sales, and cash flow to find stocks that will experience sustainable growth over time.
Momentum ScoreMomentum trading is all about taking advantage of upward or downward trends in a stock's price or earnings outlook, and these investors live by the saying "the trend is your friend." The Momentum Style Score can pinpoint good times to build a position in a stock, using factors like one-week price change and the monthly percentage change in earnings estimates.
VGM ScoreWhat if you like to use all three types of investing? The VGM Score is a combination of all Style Scores, making it one of the most comprehensive indicators to use with the Zacks Rank. It rates each stock on their combined weighted styles, which helps narrow down the companies with the most attractive value, best growth forecast, and most promising momentum.
How Style Scores Work with the Zacks Rank The Zacks Rank, which is a proprietary stock-rating model, employs earnings estimate revisions, or changes to a company's earnings expectations, to make building a winning portfolio easier.
#1 (Strong Buy) stocks have produced an unmatched +23.94% average annual return since 1988, which is more than double the S&P 500's performance over the same time frame. However, the Zacks Rank examines a ton of stocks, and there can be more than 200 companies with a Strong Buy rank, and another 600 with a #2 (Buy) rank, on any given day.
But it can feel overwhelming to pick the right stocks for you and your investing goals with over 800 top-rated stocks to choose from.
That's where the Style Scores come in.
To maximize your returns, you want to buy stocks with the highest probability of success. This means picking stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you find yourself looking at stocks with a #3 (Hold) rank, make sure they have Scores of A or B as well to ensure as much upside potential as possible.
As mentioned above, the Scores are designed to work with the Zacks Rank, so any change to a company's earnings outlook should be a deciding factor when picking which stocks to buy.
For instance, a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one that boasts Scores of A and B, still has a downward-trending earnings forecast, and a much greater likelihood its share price will decline as well.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Dropbox (DBX - Free Report) Dropbox offers a cloud-based platform that businesses and individuals can create, access and share digital content globally. It serves more than 700 million registered users across approximately 180 countries.
DBX is a #3 (Hold) on the Zacks Rank, with a VGM Score of B.
It also boasts a Value Style Score of B thanks to attractive valuation metrics like a forward P/E ratio of 11.17; value investors should take notice.
One analyst revised their earnings estimate upwards in the last 60 days for fiscal 2026. The Zacks Consensus Estimate has increased $0.02 to $3.10 per share. DBX boasts an average earnings surprise of +6.8%.
With a solid Zacks Rank and top-tier Value and VGM Style Scores, DBX should be on investors' short list.
Ashraf Alkarmi is the co-CEO of Dropbox. Dropbox Dropbox is "virtual-first" and that's not changing anytime soon, according to its new co-CEO.
While many companies continue to enforce return-to-office mandates, Ashraf Alkarmi said that when he takes over as Dropbox's sole CEO, he plans to maintain the company's remote-first structure.
Alkarmi previously held leadership roles at Vimeo and Meta and joined Dropbox as senior vice president and general manager of its core products in 2024. He became co-CEO in May, alongside Dropbox founder Drew Houston.
Alkarmi said the cloud storage company's virtual-first structure is an "incredible model" and he continues to believe in it. Dropbox officially implemented the policy in 2021 and said it redesigned its workforce to focus on flexibility.
"Flexibility and autonomy are the ultimate currency in modern work," Alkarmi told Business Insider.
The company said that average applications per job were nearly sevenfold higher in 2025 than they were before virtual-first.
It also said it has seen the highest offer acceptance rates and the lowest attrition rates since enacting the model. The company added that 74% of new hires in 2026 cite the ability to work in a virtual-first environment as one of the reasons they joined Dropbox.
Alkarmi made the distinction that virtual-first doesn't mean remote-only.
The company still has in-person gatherings, such as for its annual hack week, where workers fly in to San Francisco, Seattle, and Dublin studios to participate in a hackathon.
Employees develop and build their hack week projects from Monday to Thursday, and winning projects are chosen on Friday. Throughout the week, Dropboxers are encouraged to participate in additional programming, like customer coffee chats, AI learning sessions, and networking.
The company also holds leadership off-sites where senior staff meet to focus on company planning, strategy, and team building. Individual teams also have their own off-sites.
The combination of in-person interaction with virtual work is critical, the co-CEO said.
"In these moments, connection matters," Alkarmi said.
Alkarmi added that those gatherings help the company's workforce build connections so that when they return to virtual work, they're on the same page and have a foundation of trust and respect.
His co-CEO, Houston, has previously criticized return-to-office mandates.
"We can be a lot less dumb than forcing people back into a car three days a week or whatever, to literally be back on the same Zoom meeting they would have been at home," Houston said on the "Leadership Next" podcast in 2025.
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Key Takeaways Dropbox's Q2 earnings and revenues beat estimates on improving core FSS trends. DBX added about 96,000 paying users, marking the third straight quarter of growth. Dropbox raised its 2026 operating margin and unlevered free cash flow outlooks. Dropbox (DBX - Free Report) reported second-quarter 2026 non-GAAP earnings of 75 cents per share, up 5.6% year over year and beating the Zacks Consensus Estimate by 1.35%.
Revenues rose 0.9% year over year to $631.5 million and surpassed the consensus mark by 0.94%. Results benefited from improving core file, sync and share ("FSS") trends. Total annual recurring revenues ("ARR") increased 1% year over year to $2.566 billion, while paying users reached 18.19 million.
DBX Benefits From Improving Core TrendsExcluding FormSwift, revenues increased 1.7% year over year. On a constant-currency basis, revenues excluding FormSwift edged up 0.1%. Management said the revenues outperformance relative to guidance was primarily driven by improving core FSS trends.
ARR excluding FormSwift grew 1.7% year over year and 0.2% on a constant-currency basis. Dropbox added about 96,000 paying users sequentially, marking its third consecutive quarter of paying-user growth. Teams returned to positive license growth as pricing, packaging, onboarding and activation initiatives gained traction.
Dropbox Paying User Trends Gain StrengthDropbox ended the quarter with 18.19 million paying users, adding roughly 96,000 sequentially. This marked the third consecutive quarter of paying-user growth. The Simple plan was the largest contributor to net new paying users, while Teams returned to positive license growth.
Average revenue per paying user was $139.68 compared with $138.32 a year ago. The increase reflected foreign-exchange tailwinds and a greater mix of monthly plans. Management expects modest sequential ARPU declines through the rest of 2026.
The Simple plan remained the largest contributor to net new paying-user growth. However, management emphasized that gains were broad-based, spanning Individuals, Teams and other products, with both stronger top-of-funnel conversion and retention contributing to the improvement.
Dropbox Expands AI Across Its PlatformDropbox is embedding Dash intelligence directly into its core experience rather than positioning artificial intelligence ("AI") primarily as a stand-alone product. The company is testing its next-generation smart FSS experience with select customers and remains on track to significantly expand access through the remainder of 2026.
Management also highlighted early adoption of integrations with ChatGPT and Claude, with more than 150,000 users connecting to them. Dropbox plans to use its content, permissions, search and governance capabilities to support deeper AI-powered workflows for customers.
DBX Margins Face AI & Marketing CostsIn the second quarter of 2026, non-GAAP gross margin contracted 60 basis points (bps) year over year to 81.6%, primarily due to higher compute costs associated with the rollout of additional AI capabilities across the Teams customer base.
On the expense line, non-GAAP research and development expenses increased 2.7% year over year to $131.9 million. Sales and marketing expenses rose 3.2% to $83.5 million, while general and administrative expenses increased 6.8% to $48.9 million.
Non-GAAP operating margin was 39.7% in the reported quarter, contracting 180 bps year over year from 41.5%. The decline reflected the gross-margin pressure from AI-related compute costs as well as increased marketing investment in the core business following targeted reductions in performance marketing in the year-ago period.
DBX Generates Strong Cash Flow & Returns CapitalAs of June 30, 2026, Dropbox had $1.114 billion in cash, cash equivalents and short-term investments. During the period ended June 30, 2026, the company completed a new $400 million revolving credit facility, which remained undrawn as of June 30, 2026.
Net cash provided by operating activities was $238.5 million for the period ended June 30, 2026, compared with $260.5 million for the period ended June 30, 2025. Capital expenditures totaled $3.3 million, while unlevered free cash flow increased to $283.5 million from $276.4 million.
Dropbox Raises Full-Year Profitability OutlookFor the third quarter of 2026, Dropbox expects revenues to be in the range of $627-$630 million and constant-currency revenues in the range of $621-$624 million. Non-GAAP operating margin is projected at approximately 38.5%, with diluted weighted-average shares outstanding of 223-228 million.
For 2026, revenues are expected to be between $2.513 billion and $2.523 billion. Dropbox raised non-GAAP operating margin guidance by 50 basis points to 40-40.5% and increased its unlevered free cash flow outlook by $15 million to at least $1.070 billion. The company expects non-GAAP gross margin of approximately 81.5% and capital expenditures of $20-$25 million.
DBX Zacks Rank & Stocks to ConsiderCurrently, Dropbox carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Computer and Technology sector include Kimball Electronics (KE - Free Report) , NVIDIA (NVDA - Free Report) and Inuvo (INUV - Free Report) . Currently, Kimball Electronics and Inuvo sport a Zacks Rank #1 (Strong Buy) each, while NVDA carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Kimball Electronics have declined 5.1% in the year-to-date period. KE is set to report the fourth quarter of fiscal 2026 results on Aug. 12.
Inuvo's shares have declined 58.9% in the year-to-date period. INUV is set to report first-quarter fiscal 2027 results on Aug. 11.
Shares of NVIDIA have increased 17.4% in the year-to-date period. NVDA is slated to report second-quarter 2026 results on Aug. 26.
Amundi lessened its holdings in shares of Dropbox, Inc. (NASDAQ:DBX – Free Report) by 43.2% during the first quarter, according to the company in its most recent filing with the Securities and Exchange Commission. The institutional investor owned 111,263 shares of the company’s stock after selling 84,488 shares during the period. Amundi’s holdings in Dropbox were worth $2,528,000 as of its most recent SEC filing.
A number of other hedge funds and other institutional investors have also recently modified their holdings of the business. Palisade Asset Management LLC purchased a new position in shares of Dropbox during the third quarter valued at approximately $30,000. Kestra Advisory Services LLC bought a new stake in shares of Dropbox in the 4th quarter worth approximately $31,000. Larson Financial Group LLC grew its stake in shares of Dropbox by 228.0% in the 4th quarter. Larson Financial Group LLC now owns 1,138 shares of the company’s stock worth $32,000 after buying an additional 791 shares during the last quarter. Geneos Wealth Management Inc. grew its stake in shares of Dropbox by 78.0% in the 2nd quarter. Geneos Wealth Management Inc. now owns 1,273 shares of the company’s stock worth $36,000 after buying an additional 558 shares during the last quarter. Finally, Caitong International Asset Management Co. Ltd bought a new position in Dropbox during the 4th quarter valued at approximately $38,000. 94.84% of the stock is owned by hedge funds and other institutional investors.
Dropbox Stock Performance Shares of Dropbox stock opened at $34.54 on Friday. The stock has a market cap of $8.06 billion, a P/E ratio of 18.87, a P/E/G ratio of 3.83 and a beta of 0.64. The stock’s fifty day moving average is $28.92 and its 200 day moving average is $26.40. Dropbox, Inc. has a one year low of $21.69 and a one year high of $35.17.
Dropbox (NASDAQ:DBX – Get Free Report) last released its quarterly earnings results on Thursday, August 6th. The company reported $0.75 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.74 by $0.01. The business had revenue of $631.50 million during the quarter, compared to analyst estimates of $626.69 million. Dropbox had a negative return on equity of 30.01% and a net margin of 18.71%.Dropbox’s revenue for the quarter was up .9% on a year-over-year basis. During the same quarter in the previous year, the company posted $0.71 earnings per share. Analysts predict that Dropbox, Inc. will post 2.09 EPS for the current year.
Analyst Upgrades and Downgrades Several equities analysts have recently weighed in on DBX shares. Royal Bank Of Canada restated an “outperform” rating on shares of Dropbox in a report on Monday, June 1st. Citigroup upped their price target on shares of Dropbox from $27.00 to $28.00 and gave the stock a “neutral” rating in a research note on Monday, May 11th. Wall Street Zen raised shares of Dropbox from a “hold” rating to a “buy” rating in a research report on Sunday, June 28th. Finally, Weiss Ratings restated a “hold (c)” rating on shares of Dropbox in a research note on Friday, July 31st. One equities research analyst has rated the stock with a Buy rating, three have assigned a Hold rating and two have issued a Sell rating to the company. Based on data from MarketBeat.com, Dropbox presently has a consensus rating of “Reduce” and a consensus target price of $27.00.
Check Out Our Latest Stock Report on Dropbox
Insider Activity In related news, CEO Andrew Houston sold 37,498 shares of the business’s stock in a transaction that occurred on Thursday, May 14th. The stock was sold at an average price of $25.96, for a total transaction of $973,448.08. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CTO Ali Dasdan sold 5,666 shares of the stock in a transaction that occurred on Monday, May 18th. The stock was sold at an average price of $27.56, for a total transaction of $156,154.96. Following the completion of the sale, the chief technology officer directly owned 514,611 shares of the company’s stock, valued at $14,182,679.16. This represents a 1.09% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Over the last quarter, insiders sold 130,945 shares of company stock worth $3,565,129. 35.48% of the stock is currently owned by corporate insiders.
About Dropbox (Free Report)
Dropbox, Inc (NASDAQ: DBX) is a leading provider of cloud-based file storage, collaboration, and productivity tools. Founded in 2007 and headquartered in San Francisco, California, the company offers a suite of services designed to help individuals and organizations securely store, share, and manage digital content. Dropbox has grown from a simple file-syncing application into an integrated collaboration platform used by millions of customers around the globe.
At its core, Dropbox provides cloud storage plans tailored for consumers and businesses.
Read More Five stocks we like better than Dropbox Sandisk Just Delivered a Blowout Quarter—Here’s Why the Stock Is Falling 4 Oil and Gas ETF Plays as Prices Stay Sky-High What Tesla Stands to Lose If It Walks Away From China Disney Sets Up for a Magical Year in 2027 Want to see what other hedge funds are holding DBX? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Dropbox, Inc. (NASDAQ:DBX – Free Report).
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SAN FRANCISCO--(BUSINESS WIRE)--Dropbox, Inc. (NASDAQ: DBX), today announced financial results for its second quarter ended June 30, 2026. "Q2 reinforced that our return to growth in the core business is not a one-quarter event," said Ashraf Alkarmi, co-Chief Executive Officer of Dropbox. "We continued to see positive year-over-year revenue growth excluding FormSwift, added 96,000 paying users for our third consecutive quarter of paying user growth, exceeded our guidance on non-GAAP operating m.
Dropbox, Inc. (DBX) Q2 2026 Earnings Call August 6, 2026 5:00 PM EDT
Company Participants
Sarah Schubach - Chief Accounting Officer
Andrew W. Houston
Ashraf Alkarmi - Co-CEO & Director
Ross Tennenbaum - Chief Financial Officer
Conference Call Participants
Rishi Jaluria - RBC Capital Markets, Research Division
Steven Enders - Citigroup Inc., Research Division
Matthew Bullock - BofA Securities, Research Division
Jaiden Patel - JPMorgan Chase & Co, Research Division
Presentation
Operator
Thank you for standing by, and welcome to Dropbox's Second Quarter 2026 Earnings Conference Call. [Operator Instructions] I would now like to hand the call over to Sarah Schubach, Chief Accounting Officer and Head of Investor Relations. Please go ahead.
Sarah Schubach
Chief Accounting Officer
Good afternoon, and welcome to Dropbox's Second Quarter 2026 Earnings Call. As a reminder, we will discuss non-GAAP financial measures on this call. Definitions and reconciliations between our GAAP and non-GAAP results can be found in our earnings release and our earnings presentation posted on our IR website at investors.dropbox.com.
We will also make forward-looking statements on this call, including statements about our future outlook for our third quarter and fiscal year 2026 as well as our expectations regarding our business, assets, strategies and the macroeconomic environment. Such statements are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those described. Many of those risks and uncertainties are described in our SEC filings, including our most recent report on Form 10-Q and forthcoming report on Form 10-Q.
Forward-looking statements represent our beliefs and assumptions only as of the date such statements are made. We disclaim any obligation to update any forward-looking statements, except as required by law.
I will now turn the call over to Dropbox's Co-Founder and Co-CEO, Drew Houston.
Andrew W. Houston
Thank you, Sarah, and good afternoon, everyone. Before
5 Software Stocks That Look Too Cheap to IgnoreDropbox NASDAQ: DBX reported second-quarter 2026 revenue growth and raised its full-year profitability and free-cash-flow outlook, as executives said continued improvements in its core file-sync-and-share business are supporting a return to sustainable growth.
Revenue rose 0.9% year over year to $631.5 million in the second quarter. Excluding FormSwift, revenue increased 1.7%, or 0.1% on a constant-currency basis. Total annual recurring revenue reached $2.566 billion, up 1% from a year earlier. Excluding FormSwift, ARR grew 1.7% year over year.
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These 3 Tech Stocks Just Supercharged Their BuybacksThe company ended the quarter with 18.19 million paying users, adding approximately 96,000 users sequentially. It was Dropbox's third consecutive quarter of paying-user growth, with management citing strength in its Dropbox Simple offering and positive license growth among Teams customers.
Leadership Transition and Core Business Focus Co-Founder and Co-CEO Drew Houston addressed the leadership transition announced in May. Houston and Ashraf Alkarmi are currently serving as co-CEOs, after which Houston will become executive chairman and Alkarmi will become sole CEO.
DocuSign’s New AI-Powered IAM Platform Revitalizes TurnaroundHouston said Alkarmi made “a series of difficult calls” after taking over the company’s core business and that the business has strengthened each quarter since. He said Dropbox’s next phase will center on execution and converting its progress into “consistent, durable growth.”
Alkarmi said the company has spent the past 18 months strengthening leadership, improving execution and focusing on conversion, onboarding, activation, retention, pricing and packaging. He said those efforts have helped turn the Core business from one that had been slowing for years into one demonstrating sustainable growth.
“We’re still early in the journey,” Alkarmi said, adding that a few quarters do not define success. Still, he said the company is seeing results from investments in the fundamentals across both individual and team customers.
AI Strategy Centers on Content Platform Management framed Dropbox’s AI strategy around its existing content platform, which supports storage, synchronization, security, search, content processing, governance, permissions and version history. Alkarmi said trusted content and the infrastructure that governs it may become more valuable as AI use expands.
The company’s strategy includes consolidating services onto a common platform, embedding Dash intelligence natively into Dropbox and developing deeper workflows in markets where it believes it has an advantage. Dropbox has launched integrations with Claude and ChatGPT, and Alkarmi said more than 150,000 users have connected to those integrations despite limited dedicated investment.
Alkarmi said users are discovering the integrations organically to find and repurpose content, later storing work back in Dropbox. He said engagement and retention metrics from the integrations have been encouraging, though the company did not provide specific figures.
Dropbox is transitioning the rollout of what it previously called Dash and Dropbox into a next-generation “smart FSS” experience being tested with a select group of customers. Management said the transition does not alter its rollout schedule, and it remains on track to significantly expand access across its user base during the remainder of 2026.
The company also identified video and media review tool Replay as an example of a deeper workflow opportunity and said it is validating adjacent areas including digital asset management and AI-powered workflows.
Margins, Cash Flow and Capital Returns Second-quarter non-GAAP gross margin was 81.6%, down about 60 basis points from the prior-year period. Chief Financial Officer Ross Tennenbaum attributed the decline primarily to compute costs associated with expanding AI capabilities to the Teams customer base.
Non-GAAP operating margin was 39.7%, above the company’s 38.5% guidance but down roughly 180 basis points year over year. Tennenbaum said the year-over-year decline reflected AI-related gross-margin pressure and increased marketing investment following targeted reductions in performance marketing during the year-earlier period.
Non-GAAP net income totaled $170 million, compared with $197.7 million a year earlier, primarily due to higher interest expense related to the company’s term loan facility. Diluted earnings per share were $0.75, compared with $0.71 in the prior-year quarter, aided by a lower diluted share count.
Cash flow from operations was $238.5 million, down from $260.5 million a year earlier, while unlevered free cash flow rose to $283.5 million from $276.4 million. Unlevered free cash flow per share increased 25% year over year to $1.25.
Cash and short-term investments at quarter-end were $1.114 billion. Dropbox completed a new, undrawn $400 million revolving credit facility. The company announced a new $900 million share-repurchase authorization. During the quarter, Dropbox repurchased about 12.6 million shares for approximately $315 million. Approximately $1.385 billion remained under its existing repurchase authorization at the end of the quarter. Outlook Raised for Full-Year Profitability and Free Cash Flow For the third quarter, Dropbox expects revenue of $627 million to $630 million. Excluding FormSwift, the midpoint implies roughly flat year-over-year growth. The company expects a currency tailwind of about $6 million and forecast non-GAAP operating margin of approximately 38.5%.
For full-year 2026, Dropbox raised its total revenue outlook to $2.513 billion to $2.523 billion, an increase of $13.5 million at the midpoint. Excluding FormSwift, the midpoint implies approximately 80 basis points of year-over-year growth. The company expects a currency tailwind of roughly $31 million for the year.
Dropbox raised its full-year non-GAAP operating-margin outlook by 50 basis points to 40.0% to 40.5% and increased expected unlevered free cash flow to at least $1.070 billion. It expects gross margin of approximately 81.5%.
Tennenbaum said Dropbox expects positive paying-user growth for the full year, while average revenue per paying user is expected to decline modestly on a sequential basis through the rest of 2026. He said ARPU will be affected by the mix of monthly plans, the rollout of Dropbox Simple and the eventual rolling off of FormSwift, partially offset by foreign-exchange effects.
Management said AI-related costs may pressure gross margin as product rollout and adoption increase, but infrastructure efficiencies are expected to offset part of that pressure. The company said it is also seeking efficiencies in research and development and rebalancing its go-to-market organization toward priority markets, customer segments and sales routes.
About Dropbox (NASDAQ:DBX)Dropbox, Inc NASDAQ: DBX is a leading provider of cloud-based file storage, collaboration, and productivity tools. Founded in 2007 and headquartered in San Francisco, California, the company offers a suite of services designed to help individuals and organizations securely store, share, and manage digital content. Dropbox has grown from a simple file-syncing application into an integrated collaboration platform used by millions of customers around the globe.
At its core, Dropbox provides cloud storage plans tailored for consumers and businesses.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].
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Dropbox (DBX - Free Report) came out with quarterly earnings of $0.75 per share, beating the Zacks Consensus Estimate of $0.74 per share. This compares to earnings of $0.71 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of +1.35%. A quarter ago, it was expected that this online file-sharing company would post earnings of $0.71 per share when it actually produced earnings of $0.76, delivering a surprise of +7.04%.
Over the last four quarters, the company has surpassed consensus EPS estimates four times.
Dropbox, which belongs to the Zacks Internet - Services industry, posted revenues of $631.5 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 0.94%. This compares to year-ago revenues of $625.7 million. The company has topped consensus revenue estimates four times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Dropbox shares have added about 25.9% since the beginning of the year versus the S&P 500's gain of 12.8%.
What's Next for Dropbox?While Dropbox has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Dropbox was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.82 on $625.31 million in revenues for the coming quarter and $3.08 on $2.51 billion in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Services is currently in the bottom 38% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
One other stock from the broader Zacks Computer and Technology sector, Enovix Corporation (ENVX - Free Report) , is yet to report results for the quarter ended June 2026. The results are expected to be released on August 12.
This company is expected to post quarterly loss of $0.14 per share in its upcoming report, which represents a year-over-year change of -7.7%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.
Enovix Corporation's revenues are expected to be $8.44 million, up 13% from the year-ago quarter.
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Ashraf Alkarmi is the co-CEO of Dropbox. Dropbox Disagreeing with coworkers is rarely easy — and it's even trickier when that coworker is your co-CEO.
Dropbox co-CEO Ashraf Alkarmi told Business Insider that disagreeing with coworkers is simply part of any job.
Alkarmi, who previously held leadership roles at Vimeo and Meta, joined Dropbox as senior vice president and general manager of its core products in 2024. He became co-CEO in May, alongside Dropbox founder Drew Houston, and will eventually become the company's sole CEO.
"Since I joined Dropbox, I had a relationship with Drew that was really based on trust, respect, and debate," Alkarmi said.
Alkarmi said the first step to navigating disagreements is building trust and mutual respect with your coworkers. When that foundation is in place, people know your feedback comes from a good place.
A foundation of trust isn't enough, though. The second key to healthy disagreement, Alkarmi said, is being a truth teller.
"Use facts," the co-CEO said. "Use a lot of data. Use what you believe."
Alkarmi said it's fine to trust your instincts, but your perspective should be backed by clear reasoning. He said it's important to communicate directly rather than expressing disagreement in a passive-aggressive or hidden manner.
"I'm a believer in radical candor," Alkarmi said. "Have the trust and care, and deliver it directly."
Alkarmi also said it's important not to avoid difficult conversations. Those moments, he said, are often where trust and respect are built.
"In moments where you are actually delivering something that's hard, but with respect and care, it actually helps build that flywheel of trust and respect," Alkarmi said.
Even after following those steps, some arguments don't end in both parties seeing eye-to-eye.
In those situations, Alkarmi said he and Dropbox founder and co-CEO Drew Houston have developed a system. Alkarmi said he'll continue challenging an idea until Houston uses a specific keyword — "final" — to signal that the decision has been made. Until then, he knows the discussion is still open for debate.
Once Houston makes the final call, though, Alkarmi said there's one "critical" step that makes the dynamic work: full commitment. After Alkarmi has had the chance to discuss the issue and explain his reasoning, he treats the decision as his own and commits to making it successful, he said.
Alkarmi underscored a concept Jeff Bezos has popularized in Silicon Valley: "disagree and commit." In his 2016 shareholder letter, Bezos wrote that being willing to take a gamble on a decision you initially opposed can "save a lot of time" when colleagues can't reach a consensus.
Alkarmi said that once a decision has been made, both parties need to fully embrace it.
"Whether it works or not, it's not his opinion or my opinion. It's what we both fundamentally actually ended up agreeing on," Alkarmi said.
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In the latest close session, Dropbox (DBX - Free Report) was down 3.66% at $32.11. The stock's change was less than the S&P 500's daily gain of 1.66%. Elsewhere, the Dow saw an upswing of 1.19%, while the tech-heavy Nasdaq appreciated by 2.78%.
The stock of online file-sharing company has risen by 17.32% in the past month, leading the Computer and Technology sector's loss of 7.65% and the S&P 500's loss of 1.49%.
The investment community will be paying close attention to the earnings performance of Dropbox in its upcoming release. The company is slated to reveal its earnings on August 6, 2026. On that day, Dropbox is projected to report earnings of $0.74 per share, which would represent year-over-year growth of 4.23%. Meanwhile, our latest consensus estimate is calling for revenue of $625.6 million, down 0.02% from the prior-year quarter.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $3.08 per share and a revenue of $2.5 billion, indicating changes of +8.45% and -0.65%, respectively, from the former year.
Investors should also pay attention to any latest changes in analyst estimates for Dropbox. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, there's been no change in the Zacks Consensus EPS estimate. Dropbox presently features a Zacks Rank of #3 (Hold).
In terms of valuation, Dropbox is currently trading at a Forward P/E ratio of 10.82. This signifies a discount in comparison to the average Forward P/E of 16.16 for its industry.
One should further note that DBX currently holds a PEG ratio of 2.47. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. DBX's industry had an average PEG ratio of 1.79 as of yesterday's close.
The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 156, putting it in the bottom 37% of all 250+ industries.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.
Ali Dasdan, Chief Technology Officer of Dropbox, Inc. (DBX +2.67%), reported a sale of 12,972 shares on July 14, 2026, according to an SEC Form 4 filing.
Transaction summaryMetricValueTransaction value$389,160Shares sold (directly held)12,972Post-transaction shares (directly held)~501,639Post-transaction value~$15.03 millionTransaction value based on SEC Form 4 weighted average sale price ($30.00); post-transaction value based on July 14, 2026 market close ($29.97).
Key questionsWhat was the context for this equity disposition?
The sale was conducted through a pre-arranged Rule 10b5-1 trading plan established in May 2025, which allows insiders to execute trades according to predetermined schedules to avoid potential conflicts involving non-public information.How does this transaction impact the CTO's long-term alignment with the company?
Despite the sale of 12,972 shares, Dasdan retains a significant direct interest of ~501,639 shares; furthermore, the executive holds restricted stock units with vesting schedules extending through November 15, 2030, ensuring ongoing exposure to long-term performance milestones.What are the fundamental financial metrics for Dropbox currently?
The company reports trailing twelve-month revenue of $2.5 billion and net income of $472.6 million, while the stock has delivered an 11% return over the 12-month period ending on the July 14, 2026 transaction date.What is the market valuation of the executive's remaining direct equity?
At the July 15, 2026 market close price of $30.35 per share, the executive's ~501,639 directly held shares represent a total market value of approximately $15.2 million.Company OverviewMetricValueShare Price (as of market close 2026-07-15)$30.35Market Capitalization$7.7 billionRevenue (TTM)$2.5 billionNet Income (TTM)$472.6 millionCompany SnapshotDropbox provides comprehensive file backup, synchronization, and sharing solutions through its integrated platform, which includes specialized products such as Dropbox Sign for digital signatures, Dropbox Dash for unified search and discovery, Dropbox Reclaim.ai for calendar management, and DocSend for document tracking and analytics.The company operates a subscription-based business model that generates recurring revenue from both individual users and enterprise customers through tiered pricing structures, with additional revenue streams derived from specialized vertical solutions and premium features.Dropbox serves a diverse customer base ranging from individual consumers and small businesses to large enterprises across multiple industries, with particular strength in professional services, financial services, and technology sectors requiring robust content collaboration capabilities.Dropbox maintains a market capitalization of $7.7 billion with TTM revenue of $2.5 billion and net income of $472.6 million, reflecting strong profitability and operational efficiency in the cloud storage and content collaboration sector.
The company's diversified product portfolio extends beyond traditional file storage to encompass specialized workflow solutions, positioning it as a comprehensive platform for enterprise content management and collaboration. With 2,113 employees and a one-year stock appreciation of 10.63%, Dropbox demonstrates sustained market confidence in its ability to capture growth opportunities within the expanding digital workplace infrastructure market.
What this transaction means for investorsThe July 14 sale of Dropbox stock by CTO Ali Dasdan was a non-discretionary transaction executed as part of his Rule 10b5-1 trading plan. This suggests the disposition is not a red flag for investors. In addition, Dasdan maintained a substantial equity stake in the company post-transaction, with over half a million directly-held shares.
Dasdan’s sale occurred at a time when Dropbox stock was on an upswing. Shares were near their 52-week high of $32.40 when the CTO sold for a weighted average price of $30.00 per share.
Dropbox stock was up due to solid performance in the first quarter. Revenue rose to $629.5 million, up from $624.7 million in 2025, with a gross margin of nearly 80%. The company is also profitable with Q1 net income of $114.5 million.
Dropbox introduced new artificial intelligence tools to make working with its solutions easier and more efficient for customers. Its customer base has remained steady over the past three years at over 18 million subscribers through 2025.
Robert Izquierdo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Dropbox. The Motley Fool has a disclosure policy.
Dropbox (DBX - Free Report) ended the recent trading session at $29.42, demonstrating a -3.64% change from the preceding day's closing price. This change lagged the S&P 500's 0.89% gain on the day. Elsewhere, the Dow saw an upswing of 0.74%, while the tech-heavy Nasdaq appreciated by 1.29%.
The online file-sharing company's stock has climbed by 18.33% in the past month, exceeding the Computer and Technology sector's loss of 6.6% and the S&P 500's loss of 0.63%.
The investment community will be paying close attention to the earnings performance of Dropbox in its upcoming release. The company is slated to reveal its earnings on August 6, 2026. The company is forecasted to report an EPS of $0.74, showcasing a 4.23% upward movement from the corresponding quarter of the prior year. Our most recent consensus estimate is calling for quarterly revenue of $625.6 million, down 0.02% from the year-ago period.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $3.08 per share and revenue of $2.5 billion. These totals would mark changes of +8.45% and -0.65%, respectively, from last year.
It's also important for investors to be aware of any recent modifications to analyst estimates for Dropbox. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, there's been no change in the Zacks Consensus EPS estimate. Right now, Dropbox possesses a Zacks Rank of #3 (Hold).
Looking at valuation, Dropbox is presently trading at a Forward P/E ratio of 9.91. This expresses a discount compared to the average Forward P/E of 17.28 of its industry.
It's also important to note that DBX currently trades at a PEG ratio of 2.26. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. DBX's industry had an average PEG ratio of 1.87 as of yesterday's close.
The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 100, putting it in the top 41% of all 250+ industries.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.
SAN FRANCISCO--(BUSINESS WIRE)--Dropbox, Inc. (NASDAQ: DBX) announced today that it will report financial results for the second quarter ended June 30, 2026 after market close on Thursday, August 6, 2026. The company will also hold a conference call on the same day at 2:00 PM PT / 5:00 PM ET to discuss its financial results with the investment community.
A live webcast and replay of the conference call will be accessible on the Dropbox investor relations website at http://investors.dropbox.com.
About Dropbox
Dropbox is one place to keep life organized and keep work moving. With more than 700 million registered users across 180 countries, we’re on a mission to design a more enlightened way of working. Dropbox is headquartered in San Francisco, CA. For more information on our mission and products, visit dropbox.com.
In the latest close session, Dropbox (DBX - Free Report) was up +1.27% at $30.35. The stock exceeded the S&P 500, which registered a gain of 0.38% for the day. Elsewhere, the Dow gained 0.29%, while the tech-heavy Nasdaq added 0.62%.
Coming into today, shares of the online file-sharing company had gained 9.78% in the past month. In that same time, the Computer and Technology sector lost 0.53%, while the S&P 500 gained 1.61%.
Investors will be eagerly watching for the performance of Dropbox in its upcoming earnings disclosure. In that report, analysts expect Dropbox to post earnings of $0.74 per share. This would mark year-over-year growth of 4.23%. In the meantime, our current consensus estimate forecasts the revenue to be $625.6 million, indicating a 0.02% decline compared to the corresponding quarter of the prior year.
For the full year, the Zacks Consensus Estimates are projecting earnings of $3.08 per share and revenue of $2.5 billion, which would represent changes of +8.45% and -0.65%, respectively, from the prior year.
Any recent changes to analyst estimates for Dropbox should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Currently, Dropbox is carrying a Zacks Rank of #3 (Hold).
Investors should also note Dropbox's current valuation metrics, including its Forward P/E ratio of 9.73. This represents a discount compared to its industry average Forward P/E of 17.16.
It's also important to note that DBX currently trades at a PEG ratio of 2.22. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. Internet - Services stocks are, on average, holding a PEG ratio of 1.55 based on yesterday's closing prices.
The Internet - Services industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 94, finds itself in the top 39% echelons of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
In the latest trading session, Dropbox (DBX - Free Report) closed at $29.41, marking a +2.01% move from the previous day. This move outpaced the S&P 500's daily gain of 0.81%. Elsewhere, the Dow saw an upswing of 0.27%, while the tech-heavy Nasdaq appreciated by 1.3%.
Shares of the online file-sharing company witnessed a gain of 4.27% over the previous month, beating the performance of the Computer and Technology sector with its loss of 1.59%, and the S&P 500's gain of 1.13%.
Market participants will be closely following the financial results of Dropbox in its upcoming release. The company is expected to report EPS of $0.74, up 4.23% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $625.6 million, down 0.02% from the year-ago period.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $3.08 per share and revenue of $2.5 billion, indicating changes of +8.45% and -0.65%, respectively, compared to the previous year.
It's also important for investors to be aware of any recent modifications to analyst estimates for Dropbox. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. At present, Dropbox boasts a Zacks Rank of #3 (Hold).
In the context of valuation, Dropbox is at present trading with a Forward P/E ratio of 9.36. This valuation marks a discount compared to its industry average Forward P/E of 16.4.
Investors should also note that DBX has a PEG ratio of 2.14 right now. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. Internet - Services stocks are, on average, holding a PEG ratio of 1.66 based on yesterday's closing prices.
The Internet - Services industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 158, positioning it in the bottom 36% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
Looking for a stock that has been consistently beating earnings estimates and might be well positioned to keep the streak alive in its next quarterly report? Dropbox (DBX - Free Report) , which belongs to the Zacks Internet - Services industry, could be a great candidate to consider.
When looking at the last two reports, this online file-sharing company has recorded a strong streak of surpassing earnings estimates. The company has topped estimates by 5.04%, on average, in the last two quarters.
For the most recent quarter, Dropbox was expected to post earnings of $0.71 per share, but it reported $0.76 per share instead, representing a surprise of 7.04%. For the previous quarter, the consensus estimate was $0.66 per share, while it actually produced $0.68 per share, a surprise of 3.03%.
Price and EPS Surprise
With this earnings history in mind, recent estimates have been moving higher for Dropbox. In fact, the Zacks Earnings ESP (Expected Surprise Prediction) for the company is positive, which is a great sign of an earnings beat, especially when you combine this metric with its nice Zacks Rank.
Our research shows that stocks with the combination of a positive Earnings ESP and a Zacks Rank #3 (Hold) or better produce a positive surprise nearly 70% of the time. In other words, if you have 10 stocks with this combination, the number of stocks that beat the consensus estimate could be as high as seven.
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a version of the Zacks Consensus whose definition is related to change. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.
Dropbox currently has an Earnings ESP of +4.52%, which suggests that analysts have recently become bullish on the company's earnings prospects. This positive Earnings ESP when combined with the stock's Zacks Rank #2 (Buy) indicates that another beat is possibly around the corner.
When the Earnings ESP comes up negative, investors should note that this will reduce the predictive power of the metric. But, a negative value is not indicative of a stock's earnings miss.
Many companies end up beating the consensus EPS estimate, though this is not the only reason why their shares gain. Additionally, some stocks may remain stable even if they end up missing the consensus estimate.
Because of this, it's really important to check a company's Earnings ESP ahead of its quarterly release to increase the odds of success. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both.
The popular research service can help you become a smarter, more self-assured investor, giving you access to daily updates of the Zacks Rank and Zacks Industry Rank, the Zacks #1 Rank List, Equity Research reports, and Premium stock screens.
It also includes access to the Zacks Style Scores.
What are the Zacks Style Scores? The Zacks Style Scores is a unique set of guidelines that rates stocks based on three popular investing types, and were developed as complementary indicators for the Zacks Rank. This combination helps investors choose securities with the highest chances of beating the market over the next 30 days.
Based on their value, growth, and momentum characteristics, each stock is assigned a rating of A, B, C, D, or F. The better the score, the better chance the stock will outperform; an A is better than a B, a B is better than a C, and so on.
The Style Scores are broken down into four categories:
Value ScoreFinding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to highlight the most attractive and discounted stocks.
Growth ScoreWhile good value is important, growth investors are more focused on a company's financial strength and health, and its future outlook. The Growth Style Score takes projected and historic earnings, sales, and cash flow into account to uncover stocks that will see long-term, sustainable growth.
Momentum ScoreMomentum traders and investors live by the saying "the trend is your friend." This investing style is all about taking advantage of upward or downward trends in a stock's price or earnings outlook. Employing factors like one-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to build a position in high-momentum stocks.
VGM ScoreWhat if you like to use all three types of investing? The VGM Score is a combination of all Style Scores, making it one of the most comprehensive indicators to use with the Zacks Rank. It rates each stock on their combined weighted styles, which helps narrow down the companies with the most attractive value, best growth forecast, and most promising momentum.
How Style Scores Work with the Zacks Rank The Zacks Rank, which is a proprietary stock-rating model, employs earnings estimate revisions, or changes to a company's earnings expectations, to make building a winning portfolio easier.
It's highly successful, with #1 (Strong Buy) stocks producing an unmatched +23.94% average annual return since 1988. That's more than double the S&P 500. But because of the large number of stocks we rate, there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
This totals more than 800 top-rated stocks, and it can be overwhelming to try and pick the best stocks for you and your portfolio.
That's where the Style Scores come in.
To maximize your returns, you want to buy stocks with the highest probability of success. This means picking stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you find yourself looking at stocks with a #3 (Hold) rank, make sure they have Scores of A or B as well to ensure as much upside potential as possible.
As mentioned above, the Scores are designed to work with the Zacks Rank, so any change to a company's earnings outlook should be a deciding factor when picking which stocks to buy.
A stock with a #4 (Sell) or #5 (Strong Sell) rating, for instance, even one with Scores of A and B, will still have a declining earnings forecast, and a greater chance its share price will fall too.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Dropbox (DBX - Free Report) Dropbox offers a cloud-based platform that businesses and individuals can create, access and share digital content globally. It serves more than 700 million registered users across approximately 180 countries.
DBX is a #2 (Buy) on the Zacks Rank, with a VGM Score of A.
Additionally, the company could be a top pick for growth investors. DBX has a Growth Style Score of B, forecasting year-over-year earnings growth of 8.5% for the current fiscal year.
Two analysts revised their earnings estimate higher in the last 60 days for fiscal 2026, while the Zacks Consensus Estimate has increased $0.04 to $3.08 per share. DBX also boasts an average earnings surprise of +9.6%.
With a solid Zacks Rank and top-tier Growth and VGM Style Scores, DBX should be on investors' short list.
In the latest trading session, Dropbox (DBX - Free Report) closed at $25.08, marking a -4.75% move from the previous day. This change lagged the S&P 500's daily loss of 0.01%. Elsewhere, the Dow gained 0.14%, while the tech-heavy Nasdaq lost 0.46%.
Coming into today, shares of the online file-sharing company had gained 1.39% in the past month. In that same time, the Computer and Technology sector lost 2.57%, while the S&P 500 lost 1.4%.
Investors will be eagerly watching for the performance of Dropbox in its upcoming earnings disclosure. The company is predicted to post an EPS of $0.72, indicating a 1.41% growth compared to the equivalent quarter last year. Our most recent consensus estimate is calling for quarterly revenue of $625.6 million, down 0.02% from the year-ago period.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $3.01 per share and a revenue of $2.5 billion, signifying shifts of +5.99% and -0.65%, respectively, from the last year.
It's also important for investors to be aware of any recent modifications to analyst estimates for Dropbox. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 2.16% higher. As of now, Dropbox holds a Zacks Rank of #2 (Buy).
With respect to valuation, Dropbox is currently being traded at a Forward P/E ratio of 8.75. This valuation marks a discount compared to its industry average Forward P/E of 14.42.
Meanwhile, DBX's PEG ratio is currently 2. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. As of the close of trade yesterday, the Internet - Services industry held an average PEG ratio of 1.52.
The Internet - Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 167, putting it in the bottom 32% of all 250+ industries.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.
Two factors often determine stock prices in the long run: earnings and interest rates. Investors can't control the latter, but they can focus on a company's earnings results every quarter.
Life and the stock market are both about expectations, and rising above what is expected is often rewarded, while falling short can come with negative consequences. Investors might want to try to capture stronger returns by finding positive earnings surprises.
Now that we know how important earnings and earnings surprises are, it's time to show investors how to take advantage of these events to boost their returns by utilizing the Zacks Earnings ESP filter.
The Zacks Earnings ESP, ExplainedThe Zacks Earnings ESP is more formally known as the Expected Surprise Prediction, and it aims to grab the inside track on the latest analyst estimate revisions ahead of a company's report. The idea is relatively intuitive as a newer projection might be based on more complete information.
With this in mind, the Expected Surprise Prediction compares the Most Accurate Estimate (being the most recent) against the overall Zacks Consensus Estimate. The percentage difference provides the ESP figure. The system also utilizes our core Zacks Rank to provide a stronger system for identifying stocks that might beat their next quarterly earnings estimate and possibly see the stock price climb.
When we join a positive earnings ESP with a Zacks Rank #3 (Hold) or stronger, stocks posted a positive bottom-line surprise 70% of the time. Plus, this system saw investors produce roughly 28% annual returns on average, according to our 10 year backtest.
Most stocks, about 60%, fall into the #3 (Hold) category, and they are expected to perform in-line with the broader market. Stocks with a #2 (Buy) and #1 (Strong Buy) rating, or the top 15% and top 5% of stocks, respectively, should outperform the market, with Strong Buy stocks outperforming more than any other rank.
Should You Consider Alphabet?Now that we understand what the ESP is and how beneficial it can be, let's dive into a stock that currently fits the bill. Alphabet (GOOGL - Free Report) earns a #3 (Hold) right now and its Most Accurate Estimate sits at $2.92 a share, just 30 days from its upcoming earnings release on July 22, 2026.
GOOGL has an Earnings ESP figure of +2.13%, which, as explained above, is calculated by taking the percentage difference between the $2.92 Most Accurate Estimate and the Zacks Consensus Estimate of $2.86. Alphabet is one of a large database of stocks with positive ESPs. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
GOOGL is one of just a large database of Computer and Technology stocks with positive ESPs. Another solid-looking stock is Dropbox (DBX - Free Report) .
Dropbox, which is readying to report earnings on August 6, 2026, sits at a Zacks Rank #2 (Buy) right now. Its Most Accurate Estimate is currently $0.77 a share, and DBX is 45 days out from its next earnings report.
For Dropbox, the percentage difference between its Most Accurate Estimate and its Zacks Consensus Estimate of $0.74 is +4.52%.
GOOGL and DBX's positive ESP metrics may signal that a positive earnings surprise for both stocks is on the horizon.
Find Stocks to Buy or Sell Before They're ReportedUse the Zacks Earnings ESP Filter to turn up stocks with the highest probability of positively, or negatively, surprising to buy or sell before they're reported for profitable earnings season trading. Check it out here >>
Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both.
The popular research service can help you become a smarter, more self-assured investor, giving you access to daily updates of the Zacks Rank and Zacks Industry Rank, the Zacks #1 Rank List, Equity Research reports, and Premium stock screens.
Zacks Premium includes access to the Zacks Style Scores as well.
What are the Zacks Style Scores? The Zacks Style Scores is a unique set of guidelines that rates stocks based on three popular investing types, and were developed as complementary indicators for the Zacks Rank. This combination helps investors choose securities with the highest chances of beating the market over the next 30 days.
Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the stock will outperform.
The Style Scores are broken down into four categories:
Value ScoreFor value investors, it's all about finding good stocks at good prices, and discovering which companies are trading under their true value before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to help pick out the most attractive and discounted stocks.
Growth ScoreGrowth investors, on the other hand, are more concerned with a company's financial strength and health, and its future outlook. The Growth Style Score examines things like projected and historic earnings, sales, and cash flow to find stocks that will experience sustainable growth over time.
Momentum ScoreMomentum traders and investors live by the saying "the trend is your friend." This investing style is all about taking advantage of upward or downward trends in a stock's price or earnings outlook. Employing factors like one-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to build a position in high-momentum stocks.
VGM ScoreWhat if you like to use all three types of investing? The VGM Score is a combination of all Style Scores, making it one of the most comprehensive indicators to use with the Zacks Rank. It rates each stock on their combined weighted styles, which helps narrow down the companies with the most attractive value, best growth forecast, and most promising momentum.
How Style Scores Work with the Zacks Rank A proprietary stock-rating model, the Zacks Rank utilizes the power of earnings estimate revisions, or changes to a company's earnings outlook, to help investors create a successful portfolio.
It's highly successful, with #1 (Strong Buy) stocks producing an unmatched +24% average annual return since 1988. That's more than double the S&P 500. But because of the large number of stocks we rate, there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
This totals more than 800 top-rated stocks, and it can be overwhelming to try and pick the best stocks for you and your portfolio.
That's where the Style Scores come in.
To have the best chance of big returns, you'll want to always consider stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B, which will give you the highest probability of success. If you're looking at stocks with a #3 (Hold) rank, it's important they have Scores of A or B as well to ensure as much upside potential as possible.
The direction of a stock's earnings estimate revisions should always be a key factor when choosing which stocks to buy, since the Scores were created to work together with the Zacks Rank.
A stock with a #4 (Sell) or #5 (Strong Sell) rating, for instance, even one with Scores of A and B, will still have a declining earnings forecast, and a greater chance its share price will fall too.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Dropbox (DBX - Free Report) Dropbox offers a cloud-based platform that businesses and individuals can create, access and share digital content globally. It serves more than 700 million registered users across approximately 180 countries.
DBX is a #2 (Buy) on the Zacks Rank, with a VGM Score of A.
It also boasts a Value Style Score of B thanks to attractive valuation metrics like a forward P/E ratio of 8.62; value investors should take notice.
Two analysts revised their earnings estimate upwards in the last 60 days for fiscal 2026. The Zacks Consensus Estimate has increased $0.03 to $3.08 per share. DBX boasts an average earnings surprise of +9.6%.
With a solid Zacks Rank and top-tier Value and VGM Style Scores, DBX should be on investors' short list.
Dropbox (DBX - Free Report) ended the recent trading session at $26.41, demonstrating a -3.26% change from the preceding day's closing price. This change lagged the S&P 500's daily loss of 1.22%. On the other hand, the Dow registered a loss of 0.98%, and the technology-centric Nasdaq decreased by 1.35%.
Heading into today, shares of the online file-sharing company had lost 0.84% over the past month, lagging the Computer and Technology sector's gain of 1.19% and the S&P 500's gain of 1.56%.
Investors will be eagerly watching for the performance of Dropbox in its upcoming earnings disclosure. On that day, Dropbox is projected to report earnings of $0.74 per share, which would represent year-over-year growth of 4.23%. Meanwhile, the latest consensus estimate predicts the revenue to be $625.6 million, indicating a 0.02% decrease compared to the same quarter of the previous year.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $3.08 per share and a revenue of $2.5 billion, representing changes of +8.45% and -0.65%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for Dropbox. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Dropbox is holding a Zacks Rank of #2 (Buy) right now.
Investors should also note Dropbox's current valuation metrics, including its Forward P/E ratio of 8.86. This indicates a discount in contrast to its industry's Forward P/E of 15.84.
It's also important to note that DBX currently trades at a PEG ratio of 2.02. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Internet - Services industry had an average PEG ratio of 1.63 as trading concluded yesterday.
The Internet - Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 166, which puts it in the bottom 32% of all 250+ industries.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both.
The research service features daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, all of which will help you become a smarter, more confident investor.
Zacks Premium includes access to the Zacks Style Scores as well.
What are the Zacks Style Scores? The Zacks Style Scores is a unique set of guidelines that rates stocks based on three popular investing types, and were developed as complementary indicators for the Zacks Rank. This combination helps investors choose securities with the highest chances of beating the market over the next 30 days.
Each stock is assigned a rating of A, B, C, D, or F based on their value, growth, and momentum characteristics. Just like in school, an A is better than a B, a B is better than a C, and so on -- that means the better the score, the better chance the stock will outperform.
The Style Scores are broken down into four categories:
Value ScoreFor value investors, it's all about finding good stocks at good prices, and discovering which companies are trading under their true value before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to help pick out the most attractive and discounted stocks.
Growth ScoreGrowth investors are more concerned with a stock's future prospects, and the overall financial health and strength of a company. Thus, the Growth Style Score analyzes characteristics like projected and historic earnings, sales, and cash flow to find stocks that will see sustainable growth over time.
Momentum ScoreMomentum traders and investors live by the saying "the trend is your friend." This investing style is all about taking advantage of upward or downward trends in a stock's price or earnings outlook. Employing factors like one-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to build a position in high-momentum stocks.
VGM ScoreWhat if you like to use all three types of investing? The VGM Score is a combination of all Style Scores, making it one of the most comprehensive indicators to use with the Zacks Rank. It rates each stock on their combined weighted styles, which helps narrow down the companies with the most attractive value, best growth forecast, and most promising momentum.
How Style Scores Work with the Zacks Rank The Zacks Rank, which is a proprietary stock-rating model, employs earnings estimate revisions, or changes to a company's earnings expectations, to make building a winning portfolio easier.
It's highly successful, with #1 (Strong Buy) stocks producing an unmatched +24% average annual return since 1988. That's more than double the S&P 500. But because of the large number of stocks we rate, there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
This totals more than 800 top-rated stocks, and it can be overwhelming to try and pick the best stocks for you and your portfolio.
That's where the Style Scores come in.
To have the best chance of big returns, you'll want to always consider stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B, which will give you the highest probability of success. If you're looking at stocks with a #3 (Hold) rank, it's important they have Scores of A or B as well to ensure as much upside potential as possible.
Since the Scores were created to work together with the Zacks Rank, the direction of a stock's earnings estimate revisions should be a key factor when choosing which stocks to buy.
For instance, a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one that boasts Scores of A and B, still has a downward-trending earnings forecast, and a much greater likelihood its share price will decline as well.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Dropbox (DBX - Free Report) Dropbox offers a cloud-based platform that businesses and individuals can create, access and share digital content globally. It serves more than 700 million registered users across approximately 180 countries.
DBX is a #2 (Buy) on the Zacks Rank, with a VGM Score of A.
Additionally, the company could be a top pick for growth investors. DBX has a Growth Style Score of B, forecasting year-over-year earnings growth of 8.5% for the current fiscal year.
Two analysts revised their earnings estimate higher in the last 60 days for fiscal 2026, while the Zacks Consensus Estimate has increased $0.03 to $3.08 per share. DBX also boasts an average earnings surprise of +9.6%.
With a solid Zacks Rank and top-tier Growth and VGM Style Scores, DBX should be on investors' short list.
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company to watch right now is Dropbox (DBX - Free Report) . DBX is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 10.6, while its industry has an average P/E of 24.58. Over the last 12 months, DBX's Forward P/E has been as high as 12.55 and as low as 9.40, with a median of 10.66.
Finally, we should also recognize that DBX has a P/CF ratio of 12.59. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. DBX's P/CF compares to its industry's average P/CF of 19.31. Over the past 52 weeks, DBX's P/CF has been as high as 16.34 and as low as 10.29, with a median of 12.49.
Value investors will likely look at more than just these metrics, but the above data helps show that Dropbox is likely undervalued currently. And when considering the strength of its earnings outlook, DBX sticks out as one of the market's strongest value stocks.
Dropbox (DBX) came out with quarterly earnings of $0.76 per share, beating the Zacks Consensus Estimate of $0.71 per share. This compares to earnings of $0.7 per share a year ago.
Dropbox earns a rating upgrade to neutral as Q1 results show stabilization and improved cash flow guidance. DBX now trades at just 6.0x FY26 EV/FCF, offering a compelling ~17% FCF yield with limited dilution. While growth remains choppy and competitive risks persist, the company's durable cash flows and AI resistance support valuation.
Many companies ended remote work arrangements that began during the coronavirus pandemic despite resistance from employees who grew accustomed to working from home.
On May 18, 2026, Dropbox Inc (DBX) shares rose 4.3% to a current price of $27.98. The stock has seen a 52-week range between $21.70 and $32.40, reflecting the v
It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Luckily, Zacks Premium offers several different ways to do both.
The research service features daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, all of which will help you become a smarter, more confident investor.
Zacks Premium also includes the Zacks Style Scores.
What are the Zacks Style Scores? Developed alongside the Zacks Rank, the Zacks Style Scores are a group of complementary indicators that help investors pick stocks with the best chances of beating the market over the next 30 days.
Each stock is assigned a rating of A, B, C, D, or F based on their value, growth, and momentum characteristics. Just like in school, an A is better than a B, a B is better than a C, and so on -- that means the better the score, the better chance the stock will outperform.
The Style Scores are broken down into four categories:
Value ScoreValue investors love finding good stocks at good prices, especially before the broader market catches on to a stock's true value. Utilizing ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and many other multiples, the Value Style Score identifies the most attractive and most discounted stocks.
Growth ScoreGrowth investors, on the other hand, are more concerned with a company's financial strength and health, and its future outlook. The Growth Style Score examines things like projected and historic earnings, sales, and cash flow to find stocks that will experience sustainable growth over time.
Momentum ScoreMomentum investors, who live by the saying "the trend is your friend," are most interested in taking advantage of upward or downward trends in a stock's price or earnings outlook. Utilizing one-week price change and the monthly percentage change in earnings estimates, among other factors, the Momentum Style Score can help determine favorable times to buy high-momentum stocks.
VGM ScoreIf you like to use all three kinds of investing, then the VGM Score is for you. It's a combination of all Style Scores, and is an important indicator to use with the Zacks Rank. The VGM Score rates each stock on their shared weighted styles, narrowing down the companies with the most attractive value, best growth forecast, and most promising momentum.
How Style Scores Work with the Zacks Rank The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.
Investors can count on the Zacks Rank's success, with #1 (Strong Buy) stocks producing an unmatched +23.7% average annual return since 1988, more than double the S&P 500's performance. But the model rates a large number of stocks, and there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
But it can feel overwhelming to pick the right stocks for you and your investing goals with over 800 top-rated stocks to choose from.
That's where the Style Scores come in.
To have the best chance of big returns, you'll want to always consider stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B, which will give you the highest probability of success. If you're looking at stocks with a #3 (Hold) rank, it's important they have Scores of A or B as well to ensure as much upside potential as possible.
As mentioned above, the Scores are designed to work with the Zacks Rank, so any change to a company's earnings outlook should be a deciding factor when picking which stocks to buy.
For instance, a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one that boasts Scores of A and B, still has a downward-trending earnings forecast, and a much greater likelihood its share price will decline as well.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Dropbox (DBX - Free Report) Dropbox offers a cloud-based platform that businesses and individuals can create, access and share digital content globally. It serves more than 700 million registered users across approximately 180 countries.
DBX is a #3 (Hold) on the Zacks Rank, with a VGM Score of A.
It also boasts a Value Style Score of B thanks to attractive valuation metrics like a forward P/E ratio of 9; value investors should take notice.
One analyst revised their earnings estimate upwards in the last 60 days for fiscal 2026. The Zacks Consensus Estimate has increased $0.01 to $3.06 per share. DBX boasts an average earnings surprise of +9.6%.
With a solid Zacks Rank and top-tier Value and VGM Style Scores, DBX should be on investors' short list.
Dropbox CEO Drew Houston, who founded the cloud storage company when he was 24, plans to step down and assume the role of executive chairman. Ashraf Alkarmi is being promoted from product chief to co-CEO, serving for a time alongside Houston before eventually taking the job on his own.
Dropbox said on Tuesday that CEO and co-founder Andrew Houston will step down after a transition period, promoting insider Ashraf Alkarmi to co-CEO ahead of his succession as the sole chief executive.
Apple's Tim Cook isn't the only well-known tech CEO stepping away from the chief executive role this year. Now, Dropbox, Inc. (Nasdaq: DBX) founder and CEO Drew Houston has announced he, too, is departing the company he is synonymous with.
Dropbox CEO Drew Houston plans to step down as CEO after 19 years in the role. Houston named Ashraf Alkarmi as his co-CEO and eventual successor in a memo to employees on Tuesday.
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
