Dropbox Inc. tumbled to an all-time low on Friday, extending a recent downtrend as the software company\u2019s latest results failed to convince investors of the bullish narrative that analysts continue to push.<\/p>\n
The stock dropped as much as 14% on volume that was more than three times the daily average, and the move erased more than $1 billion from the company\u2019s valuation. Friday\u2019s decline not only marked the biggest one-day percentage loss in the company\u2019s history — it went public in March 2018 — but it took shares to record intraday lows.<\/p>\n
Shares have been trending lower for weeks; Dropbox has only risen in three of the past 19 trading days, according to Bloomberg data, and it is down about 30% from a July peak.<\/p>\n
A weaker-than-expected read on billings was seen as the primary catalyst behind the decline, although analysts remain positive on the company, the decline notwithstanding.<\/p>\n
\u201cIt\u2019s frustrating to face nearly ceaseless negativity and middling performance of the stock,\u201d wrote Richard Davis, an analyst at Canaccord Genuity.<\/p>\n
\u201cWe haven\u2019t broken the bears yet,\u201d he added, but \u201cwe\u2019re willing to stick with this name.\u201d Among other factors, Davis cited a product redesign as something that could lead to long-term outperformance.<\/p>\n
Eleven analysts have the equivalent of a buy rating on the stock, compared with three firms with a hold rating and two advocating selling the stock. The average price target is a little under $30, or 60% above current levels.<\/p>\n
Here\u2019s what analysts are saying about the results:<\/p>\n
\u201cEvery relevant forward-looking metric that matters was good for this print and guide.\u201d<\/p>\n
The product redesign is focused on giving users a good experience, which Davis sees as a long-term tailwind. \u201cIt is more likely than not that Dropbox will be able to deliver long-term sustainable growth and, eventually, 30%+ [free cash flow] margins.\u201d<\/p>\n
Buy rating, $35 price target.<\/p>\n
This was a \u201csolid\u201d quarter, with revenue slightly ahead of expectations, \u201cthough billings was a bit shy due to a higher mix of monthly invoicing.\u201d<\/p>\n
The product redesign integrates the service with Slack, Zoom, and Atlassian, and \u201ca unified workspace approach should enable DBX to cross-sell additional products.\u201d<\/p>\n
Buy rating, $32 price target.<\/p>\n
\u201cOrganic fundamentals remain very much intact,\u201d although \u201cfundamental trends were modestly less robust.\u201d Expects margins to expand in the second half of the year.<\/p>\n
A product redesign \u201ccould lead to a stickier product in the workplace, which can drive robust revenue and fundamental growth trends going forward.\u201d<\/p>\n
Outperform rating, $32 price target.<\/p>\n
The results were \u201csomewhat underwhelming,\u201d and there \u201ccontinues to be what we believe is a miscommunication between management and investors.\u201d<\/p>\n
Raises earnings expectations for 2019 and 2020, but trims price target by $1 to $24. Neutral rating.<\/p>\n
The company\u2019s \u201crapid innovation cadence and continuous improvement to Company-owned infrastructure justify further upside.\u201d<\/p>\n
Overweight rating, $35 price target.<\/p>\n
Notes a \u201cstrong beat\u201d on net paid user additions, although average revenue per user fell short of expectations.<\/p>\n
Cites higher customer acquisition costs as a concern.<\/p>\n
Underperform, $19 price target.<\/p>\n
Dropbox tumbled to an all-time low on Friday, extending a recent downtrend as the software company\u2019s latest results failed to convince investors.<\/p>\n","protected":false},"author":341034,"featured_media":178216,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16],"tags":[1922],"class_list":["post-316079","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-software","tag-dropbox"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/316079"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/341034"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=316079"}],"version-history":[{"count":0,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/316079\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/178216"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=316079"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=316079"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=316079"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}