Dropbox (NASDAQ:DBX) Upgraded to "Buy" at Wall Street Zen

Key Points

• Wall Street Zen upgraded Dropbox to “Buy” from “Hold,” while overall analyst sentiment remains cautious: MarketBeat reports a “Reduce” consensus and a $33.40 average price target.
• Dropbox beat quarterly estimates, reporting adjusted EPS of $0.88 versus $0.73 expected and revenue of $637.3 million versus $629.6 million expected; revenue grew just 0.5% year over year.
• Dropbox plans to acquire Tigris Data for $350 million to expand its AI infrastructure, with management anticipating the deal will close in Q4 2026.

Dropbox (NASDAQ:DBX - Get Free Report) was upgraded by stock analysts at Wall Street Zen from a "hold" rating to a "buy" rating in a note issued to investors on Saturday, Wall Street Zen reports.

Several other equities research analysts have also recently commented on the company. Royal Bank Of Canada increased their price objective on Dropbox from $42.00 to $48.00 and gave the company an "outperform" rating in a research report on Friday. William Blair raised Dropbox from an "underperform" rating to a "market perform" rating in a report on Friday, August 7th. Stephens started coverage on shares of Dropbox in a research note on Tuesday. They set an "equal weight" rating and a $39.00 target price on the stock. Weiss Ratings upgraded shares of Dropbox from a "hold (c+)" rating to a "buy (b-)" rating in a research note on Tuesday. Finally, UBS Group upped their price target on Dropbox from $23.00 to $26.00 and gave the stock a "sell" rating in a research note on Friday. Two analysts have rated the stock with a Buy rating, four have assigned a Hold rating and three have assigned a Sell rating to the company's stock. According to MarketBeat, the stock presently has a consensus rating of "Reduce" and an average target price of $33.40.

Dropbox Price Performance

NASDAQ DBX opened at $34.66 on Friday. The company's fifty day moving average price is $35.29 and its two-hundred day moving average price is $29.25. The company has a market capitalization of $7.82 billion, a price-to-earnings ratio of 19.26, a price-to-earnings-growth ratio of 3.52 and a beta of 0.62. Dropbox has a 12 month low of $21.69 and a 12 month high of $38.22.

Dropbox (NASDAQ:DBX - Get Free Report) last issued its quarterly earnings results on Thursday, November 5th. The company reported $0.88 earnings per share for the quarter, beating analysts' consensus estimates of $0.73 by $0.15. The firm had revenue of $637.30 million during the quarter, compared to the consensus estimate of $629.59 million. Dropbox had a net margin of 17.49% and a negative return on equity of 24.26%. The business's revenue was up .5% on a year-over-year basis. During the same period in the prior year, the firm earned $0.74 EPS. As a group, analysts anticipate that Dropbox will post 1.94 EPS for the current year.

Insiders Place Their Bets

In related news, insider William T. Yoon sold 12,382 shares of the business's stock in a transaction that occurred on Friday, September 4th. The shares were sold at an average price of $34.78, for a total value of $430,645.96. Following the completion of the transaction, the insider owned 366,693 shares in the company, valued at $12,753,582.54. The trade was a 3.27% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Ross Tennenbaum sold 97,558 shares of Dropbox stock in a transaction that occurred on Thursday, September 10th. The stock was sold at an average price of $35.02, for a total transaction of $3,416,481.16. Following the sale, the chief financial officer owned 690,666 shares of the company's stock, valued at approximately $24,187,123.32. This represents a 12.38% decrease in their position. 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 1,331,268 shares of company stock valued at $46,553,783 in the last quarter. 35.48% of the stock is currently owned by insiders.

Institutional Investors Weigh In On Dropbox

Hedge funds have recently bought and sold shares of the company. Elevation Wealth Partners LLC boosted its holdings in shares of Dropbox by 63.0% during the 3rd quarter. Elevation Wealth Partners LLC now owns 1,363 shares of the company's stock valued at $46,000 after buying an additional 527 shares in the last quarter. EverSource Wealth Advisors LLC increased its holdings in shares of Dropbox by 68.1% in the 1st quarter. EverSource Wealth Advisors LLC now owns 2,052 shares of the company's stock worth $47,000 after buying an additional 831 shares during the last quarter. Farther Finance Advisors LLC lifted its stake in shares of Dropbox by 166.5% during the 3rd quarter. Farther Finance Advisors LLC now owns 2,617 shares of the company's stock worth $89,000 after acquiring an additional 1,635 shares during the last quarter. Signaturefd LLC raised its holdings in shares of Dropbox by 103.4% in the 3rd quarter. Signaturefd LLC now owns 5,616 shares of the company's stock valued at $190,000 after purchasing an additional 2,855 shares in the last quarter. Finally, Parallel Advisors LLC lifted its holdings in shares of Dropbox by 49.8% during the 1st quarter. Parallel Advisors LLC now owns 8,634 shares of the company's stock valued at $196,000 after purchasing an additional 2,869 shares during the last quarter. 94.84% of the stock is currently owned by institutional investors and hedge funds.

Key Stories Impacting Dropbox

Here are the key news stories impacting Dropbox this week:

• Positive Sentiment: Dropbox reported Q3 adjusted EPS of $0.88 versus estimates of $0.73 and revenue of $637.3 million versus $629.6 million expected. Q4 revenue guidance of $630 million–$633 million also topped the $628.4 million consensus. Q3 earnings and revenue top estimates
• Positive Sentiment: RBC raised its price target to $48 from $42 and maintained an Outperform rating, signaling improved analyst confidence. RBC raises Dropbox price target
• Positive Sentiment: Dropbox plans to acquire Tigris Data for $350 million to build out AI infrastructure and introduce DBX Agent Cloud. Management expects the deal to close in Q4 2026 and has indicated 150 basis points of operating-margin expansion in 2027. Dropbox to acquire Tigris Data Margin expansion outlook
• Neutral Sentiment: CEO Andrew Houston sold 383,800 shares under a pre-arranged Rule 10b5-1 trading plan; the planned nature of the sale makes its signal less clear. CEO share sale
• Negative Sentiment: Revenue increased just 0.5% year over year, highlighting the modest underlying growth rate. The $350 million Tigris purchase also brings investment and integration risks as Dropbox pursues its AI strategy.

Dropbox Company Profile

Dropbox, Inc NASDAQ: DBX is a software company that provides cloud-based tools for storing, organizing, sharing and collaborating on files. Its platform enables individuals, businesses and teams to access documents, photos and other content across connected devices, synchronize files and manage shared workflows.

The company's offerings include Dropbox for cloud storage and file collaboration, Dropbox Paper for shared documents and project work, Dropbox Sign for electronic signatures, and DocSend for securely sharing and tracking business documents.

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