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

Dropbox, Inc. (NASDAQ:DBX)’s stock price gapped up prior to trading on Friday following a stronger than expected earnings report. 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.

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

Analyst Upgrades and Downgrades

Several analysts have recently weighed in on the stock. Weiss Ratings reaffirmed a “hold (c+)” rating on shares of Dropbox in a report on Wednesday, October 8th. UBS Group downgraded shares of Dropbox from a “neutral” rating to a “sell” rating and reduced their price objective for the company from $29.00 to $27.00 in a research report on Thursday, September 18th. Finally, Wall Street Zen cut Dropbox from a “buy” rating to a “hold” rating in a research report on Sunday, October 26th. Three investment analysts have rated the stock with a Hold rating and one has issued a Sell rating to the company’s stock. According to data from MarketBeat, the company presently has a consensus rating of “Reduce” and a consensus price target of $29.67.

Insider Transactions at Dropbox

In other news, insider Ashraf Alkarmi sold 10,098 shares of the firm’s stock in a transaction on Monday, August 18th. The stock was sold at an average price of $27.30, for a total value of $275,675.40. Following the completion of the transaction, the insider owned 469,333 shares in the company, valued at $12,812,790.90. This trade represents a 2.11% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is available through the SEC website. Also, CEO Andrew Houston sold 101,167 shares of the business’s stock in a transaction dated Wednesday, October 1st. The stock was sold at an average price of $29.64, for a total transaction of $2,998,589.88. The SEC filing for this sale provides additional information. Insiders sold a total of 318,698 shares of company stock worth $9,251,159 over the last ninety days. 29.95% of the stock is currently owned by corporate insiders.

Institutional Trading of Dropbox

Institutional investors and hedge funds have recently modified their holdings of the business. Elequin Capital LP increased its stake in shares of Dropbox by 71.0% during the 1st quarter. Elequin Capital LP now owns 1,130 shares of the company’s stock worth $30,000 after purchasing an additional 469 shares in the last quarter. Neo Ivy Capital Management purchased a new position in Dropbox during the second quarter worth $30,000. First Horizon Corp purchased a new position in Dropbox during the third quarter worth $31,000. LRI Investments LLC raised its holdings in shares of Dropbox by 666.7% in the third quarter. LRI Investments LLC now owns 1,150 shares of the company’s stock worth $35,000 after acquiring an additional 1,000 shares during the last quarter. Finally, Geneos Wealth Management Inc. lifted its position in shares of Dropbox by 78.0% in the second quarter. Geneos Wealth Management Inc. now owns 1,273 shares of the company’s stock valued at $36,000 after acquiring an additional 558 shares in the last quarter. Hedge funds and other institutional investors own 94.84% of the company’s stock.

Dropbox Stock Up 2.8%

The firm 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. The business has a 50 day moving average of $29.77 and a 200 day moving average of $28.73.

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.