Dropbox (NASDAQ:DBX) Shares Gap Up on Better-Than-Expected Earnings

Shares of Dropbox, Inc. (NASDAQ:DBX) gapped up before the market opened on Friday following a better than expected earnings announcement. The stock had previously closed at $28.67, but opened at $30.95. Dropbox shares last traded at $29.5580, with a volume of 593,458 shares changing hands.

The company reported $0.74 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.64 by $0.10. The firm had revenue of $634.40 million for the quarter, compared to analyst estimates of $623.59 million. Dropbox had a net margin of 19.17% and a negative return on equity of 61.31%. Dropbox’s revenue was down .7% compared to the same quarter last year. During the same quarter last year, the business earned $0.60 earnings per share. Dropbox has set its FY 2025 guidance at EPS. Q4 2025 guidance at EPS.

Analyst Ratings Changes

Several equities analysts recently commented on the company. UBS Group lowered Dropbox from a “neutral” rating to a “sell” rating and dropped their target price for the company from $29.00 to $27.00 in a research note on Thursday, September 18th. Wall Street Zen downgraded shares of Dropbox from a “buy” rating to a “hold” rating in a research note on Sunday, October 26th. Finally, Weiss Ratings reiterated a “hold (c+)” rating on shares of Dropbox in a report on Wednesday, October 8th. Three equities research analysts have rated the stock with a Hold rating and one has given a Sell rating to the company. According to MarketBeat, Dropbox has an average rating of “Reduce” and a consensus target price of $29.67.

Insider Activity at Dropbox

In related news, CFO Timothy Regan sold 5,000 shares of the firm’s stock in a transaction dated Wednesday, October 1st. The stock was sold at an average price of $29.76, for a total transaction of $148,800.00. Following the sale, the chief financial officer directly owned 471,621 shares in the company, valued at approximately $14,035,440.96. This trade represents a 1.05% decrease in their position. The sale was disclosed in a filing with the SEC, which can be accessed through this link. Also, insider William T. Yoon sold 11,430 shares of the business’s stock in a transaction that occurred on Monday, September 8th. The stock was sold at an average price of $30.16, for a total value of $344,728.80. Following the transaction, the insider directly owned 223,662 shares in the company, valued at $6,745,645.92. This trade represents a 4.86% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders have sold a total of 318,698 shares of company stock valued at $9,251,159 over the last 90 days. Corporate insiders own 29.95% of the company’s stock.

Institutional Inflows and Outflows

Institutional investors and hedge funds have recently made changes to their positions in the company. State of New Jersey Common Pension Fund D increased its stake in Dropbox by 9.8% during the 3rd quarter. State of New Jersey Common Pension Fund D now owns 75,108 shares of the company’s stock worth $2,269,000 after buying an additional 6,733 shares during the period. Illinois Municipal Retirement Fund grew its stake in shares of Dropbox by 7.6% during the third quarter. Illinois Municipal Retirement Fund now owns 273,835 shares of the company’s stock valued at $8,273,000 after acquiring an additional 19,240 shares in the last quarter. LSV Asset Management increased its position in shares of Dropbox by 38.1% during the third quarter. LSV Asset Management now owns 11,613,642 shares of the company’s stock worth $350,848,000 after acquiring an additional 3,205,140 shares during the last quarter. Caprock Group LLC acquired a new position in shares of Dropbox in the third quarter worth about $897,000. Finally, Stratos Wealth Partners LTD. purchased a new position in Dropbox in the third quarter valued at about $213,000. 94.84% of the stock is currently owned by hedge funds and other institutional investors.

Dropbox Trading Up 2.8%

The business has a 50 day simple moving average of $29.77 and a two-hundred day simple moving average of $28.73. The stock has a market cap of $7.95 billion, a price-to-earnings ratio of 17.95, a price-to-earnings-growth ratio of 3.84 and a beta of 0.65.

Dropbox Company Profile

Dropbox, Inc provides a content collaboration platform worldwide. The company's platform allows individuals, families, teams, and organizations to collaborate and sign up for free through its website or app, as well as upgrade to a paid subscription plan for premium features. It serves customers in professional services, technology, media, education, industrial, consumer and retail, and financial services industries.