UBS analyst Taylor McGinnis has adjusted the price target for Dropbox (DBX, Financial), increasing it from $30 to $31. Despite this change, the firm continues to hold a Neutral stance on the stock. According to McGinnis, Dropbox's first-quarter performance exceeded concerns, even as the company faces ongoing growth challenges and other obstacles. The analyst suggests that the firm's outlook remains cautious at this time.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 7 analysts, the average target price for Dropbox Inc (DBX, Financial) is $28.78 with a high estimate of $35.00 and a low estimate of $21.00. The average target implies an downside of 3.07% from the current price of $29.69. More detailed estimate data can be found on the Dropbox Inc (DBX) Forecast page.
Based on the consensus recommendation from 12 brokerage firms, Dropbox Inc's (DBX, Financial) average brokerage recommendation is currently 3.2, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Dropbox Inc (DBX, Financial) in one year is $29.43, suggesting a downside of 0.88% from the current price of $29.69. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Dropbox Inc (DBX) Summary page.
DBX Key Business Developments
Release Date: May 08, 2025
- Revenue: $625 million, a decline of 1% year over year.
- Constant Currency Revenue: $628 million, a decline of 60 basis points year over year.
- Total ARR: $2.552 billion, down 20 basis points year over year.
- Paying Users: 18.16 million, down approximately 60,000 sequentially.
- Average Revenue Per Paying User (ARPU): $139.26, compared to $140.06 in the prior quarter.
- Gross Margin: 82.9%, down 170 basis points from the year-ago period.
- Operating Margin: 41.7%, up more than 500 basis points from the year-ago period.
- Net Income: $207 million, up 5% year over year.
- Diluted EPS: $0.70, a 21% increase year over year.
- Cash Flow from Operations: $154 million, a decrease of 12% year over year.
- Unlevered Free Cash Flow: $174 million or $0.59 per share.
- Cash and Short-term Investments: $1.2 billion.
- Share Repurchase: Approximately 18 million shares repurchased, spending approximately $500 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Dropbox Inc (DBX, Financial) achieved its highest ever non-GAAP operating margin, driven by operating efficiency and timing-related expense savings.
- The company launched a major spring update for Dash, enhancing search capabilities across various media formats, which is particularly beneficial for creative professionals.
- Dropbox Inc (DBX) made significant performance improvements in Dash, reducing latency by over 50% and integrating with essential workplace apps like Slack, Zoom, and Microsoft Teams.
- The company expanded Dash's AI writing capabilities, allowing users to draft documents quickly and customize the tone and formality.
- Dropbox Inc (DBX) maintained strong profitability and a diversified customer base, positioning it well to navigate macroeconomic uncertainties.
Negative Points
- Total revenue for Q1 declined 1% year over year, with FormSwift acting as a headwind to revenue.
- The company experienced a sequential decline in paying users, driven by reduced investment in FormSwift.
- Average revenue per paying user decreased compared to the prior quarter, influenced by FX and a shift away from higher-priced FormSwift subscriptions.
- Dropbox Inc (DBX) is facing an uncertain macroeconomic environment, which could introduce volatility to its results.
- The company is still working to streamline Dash's sales, onboarding, and activation processes, indicating room for improvement in these areas.
