Dropbox (NASDAQ:DBX) Sees Large Volume Increase - Here's Why

Key Points

• Trading volume surged: About 10.4 million Dropbox shares traded, 159% above the average daily volume; shares were at $32.14, down from the prior close of $32.58.
• Quarterly results beat estimates: Dropbox reported EPS of $0.88 versus the $0.73 consensus and revenue of $637.3 million versus $629.6 million expected. Revenue rose 0.5% year over year.
• Analyst views remain mixed: The stock has two Buy, four Hold, and three Sell ratings, with an average rating of “Reduce” and an average price target of $35.60.

Shares of Dropbox, Inc. (NASDAQ:DBX - Get Free Report) saw unusually-high trading volume on Tuesday. 10,392,980 shares traded hands during mid-day trading, an increase of 159% from the average daily volume of 4,013,373 shares. The stock last traded at $32.14 and had previously closed at $32.58.

Wall Street Analysts Forecast Growth

A number of research analysts have commented on DBX shares. UBS Group upped their price objective on Dropbox from $23.00 to $26.00 and gave the company a "sell" rating in a report on Friday. Royal Bank Of Canada lifted their target price on Dropbox from $42.00 to $48.00 and gave the stock an "outperform" rating in a report on Friday. William Blair raised shares of Dropbox from an "underperform" rating to a "market perform" rating in a research report on Friday, August 7th. Bank of America reissued an "underperform" rating on shares of Dropbox in a research report on Friday, August 7th. Finally, Weiss Ratings upgraded shares of Dropbox from a "hold (c+)" rating to a "buy (b-)" rating in a research note on Tuesday, November 3rd. Two equities research 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, Dropbox currently has an average rating of "Reduce" and an average target price of $35.60.

Dropbox Stock Performance

The stock's fifty day moving average price is $35.23 and its two-hundred day moving average price is $29.28. The company has a market cap of $7.29 billion, a P/E ratio of 17.47, a P/E/G ratio of 3.56 and a beta of 0.62.

Dropbox (NASDAQ:DBX - Get Free Report) last announced its quarterly earnings data on Thursday, November 5th. The company reported $0.88 EPS for the quarter, beating the consensus estimate of $0.73 by $0.15. Dropbox had a net margin of 17.49% and a negative return on equity of 24.26%. The business had revenue of $637.30 million during the quarter, compared to the consensus estimate of $629.59 million. During the same period in the previous year, the business earned $0.74 earnings per share. The company's revenue was up .5% on a year-over-year basis. On average, equities research analysts forecast that Dropbox, Inc. will post 2.33 EPS for the current year.

Insider Activity

In related news, CFO Ross Tennenbaum sold 97,558 shares of the stock in a transaction that occurred on Thursday, September 10th. The shares were sold at an average price of $35.02, for a total value of $3,416,481.16. Following the completion of the transaction, the chief financial officer owned 690,666 shares of the company's stock, valued at $24,187,123.32. This represents a 12.38% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider William T. Yoon sold 12,382 shares of the company's stock in a transaction on Friday, September 4th. The stock was sold at an average price of $34.78, for a total transaction of $430,645.96. Following the transaction, the insider owned 366,693 shares of the company's stock, valued at $12,753,582.54. This trade represents a 3.27% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last 90 days, insiders have sold 1,331,268 shares of company stock valued at $46,553,783. Corporate insiders own 35.48% of the company's stock.

Institutional Investors Weigh In On Dropbox

Several hedge funds have recently modified their holdings of DBX. Arrowstreet Capital Limited Partnership boosted its stake in shares of Dropbox by 12.7% during the first quarter. Arrowstreet Capital Limited Partnership now owns 8,533,736 shares of the company's stock valued at $193,886,000 after purchasing an additional 960,109 shares in the last quarter. Wedge Capital Management L L P NC boosted its position in Dropbox by 26.4% during the 2nd quarter. Wedge Capital Management L L P NC now owns 3,005,173 shares of the company's stock worth $82,552,000 after buying an additional 627,111 shares during the period. Russell Investments Group Ltd. boosted its position in Dropbox by 4.7% during the 3rd quarter. Russell Investments Group Ltd. now owns 2,237,858 shares of the company's stock worth $75,519,000 after buying an additional 100,398 shares during the period. Pacer Advisors Inc. boosted its position in Dropbox by 2.8% during the 1st quarter. Pacer Advisors Inc. now owns 2,047,966 shares of the company's stock worth $46,530,000 after buying an additional 55,921 shares during the period. Finally, KBC Group NV boosted its position in Dropbox by 12.6% during the 1st quarter. KBC Group NV now owns 944,829 shares of the company's stock worth $21,466,000 after buying an additional 105,876 shares during the period. Institutional investors and hedge funds own 94.84% of the company's stock.

Dropbox Company Profile

Dropbox, Inc is a cloud software company that helps individuals and organizations store, access, sync and share files across devices. Its core Dropbox service also supports collaboration through shared folders, comments and tools for managing digital content.

The company offers products for a range of work and collaboration needs, including Dropbox Sign for electronic signatures and DocSend for sharing and tracking documents. Dropbox has also developed tools for reviewing creative content and organizing work, alongside integrations with other business applications.

Founded in 2007 by Drew Houston and Arash Ferdowsi, Dropbox serves customers around the world.

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