Dropbox, Inc. (NASDAQ: DBX)

Sector: Technology Industry: Software - Infrastructure CIK: 0001467623
Market Cap 7.66 Bn
P/B -5.00
P/E 15.24
P/S 3.03
ROIC (Qtr) 27.98
Div Yield % 0.00
Rev 1y % (Qtr) -0.69
Total Debt (Qtr) 3.25 Bn
Debt/Equity (Qtr) -2.13

About

Dropbox, Inc., better known as Dropbox, is a technology company that operates in the cloud-based file storage and collaboration industry. The company was established in 2007 with a mission to simplify the process of accessing and sharing files for individuals and organizations. Today, Dropbox has grown into a leading provider of cloud storage solutions, serving over 18.12 million paying users as of December 31, 2023. Dropbox's primary offerings include its cloud storage platform, which enables users to access and store their files from any location...

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Price action

Investment thesis

Bull case

  • Operating cash flow of 930.20M provides exceptional 17.39x coverage of interest expenses 53.50M, showing strong debt service capability.
  • Free cash flow of 930.60M provides exceptional 17.39x coverage of interest expense 53.50M, showing strong debt service ability.
  • R&D investment of 788.10M represents healthy 1.06x of deferred revenue 740.60M, indicating strong future innovation pipeline.
  • Operating cash flow of 930.20M provides strong 344.52x coverage of operating expenses 2.70M, showing operational efficiency.
  • Retained earnings of (3.63B) represent substantial 2.37x of equity (1.53B), indicating strong internal capital generation.

Bear case

  • Investment activities of 179.80M provide weak support for R&D spending of 788.10M, which is 0.23x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 730.70M provide limited coverage of acquisition spending of (13.10M), which is -55.78x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of 930.20M provides insufficient coverage of deferred revenue obligations of 740.60M, which is 1.26x, raising concerns about future service delivery capabilities.
  • Free cash flow of 930.60M provides weak coverage of capital expenditures of (400000), with a -2326.50 ratio suggesting additional external financing needs for growth initiatives.
  • The company's operating cash flow of 930.20M shows concerning coverage of stock compensation expenses of 309.10M, with a 3.01 ratio indicating potential earnings quality issues.

Peer comparison

Companies in the Software - Infrastructure
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 MSFT Microsoft Corp 3,563.59 Bn 33.97 12.13 60.56 Bn
2 ORCL Oracle Corp 561.87 Bn 36.43 9.21 124.39 Bn
3 PLTR Palantir Technologies Inc. 413.65 Bn 377.64 106.17 0.24 Bn
4 PANW Palo Alto Networks Inc 126.45 Bn 113.19 13.23 0.35 Bn
5 CRWD CrowdStrike Holdings, Inc. 116.42 Bn -370.56 25.50 0.82 Bn
6 SNPS Synopsys Inc 86.06 Bn 64.60 12.20 14.29 Bn
7 NET Cloudflare, Inc. 62.78 Bn -609.27 31.18 3.50 Bn
8 FTNT Fortinet, Inc. 60.83 Bn 32.47 9.28 1.00 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 3.56 2.69
EV to Cash from Ops. EV/CFO 10.71 28.91
EV to Debt EV to Debt 3.06 19.83
EV to EBIT EV/EBIT 16.06 -9.95
EV to EBITDA EV/EBITDA 12.34 6.82
EV to Free Cash Flow [EV/FCF] EV/FCF 10.71 26.09
EV to Market Cap EV to Market Cap 1.30 0.36
EV to Revenue EV/Rev 3.94 -9.34
Price to Book Value [P/B] P/B -5.00 3.88
Price to Earnings [P/E] P/E 15.24 -10.66
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -0.30
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 2.71
Dividend per Basic Share Div per Share (Qtr) 0.00 0.10
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 1.68
Interest Coverage Int. cover (Qtr) 11.60 -14.20
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 105.88 -408.01
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 41.17 226.39
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -0.28
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -2.42 25.27
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -4.38 47.48
EBIT Growth (1y) % EBIT 1y % (Qtr) -7.94 20.13
EBT Growth (1y) % EBT 1y % (Qtr) -17.80 14.16
EPS Growth (1y) % EPS 1y % (Qtr) 2.29 67.50
FCF Growth (1y) % FCF 1y % (Qtr) 6.50 296.60
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -2.60 46.75
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.90 0.67
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.01
Cash Ratio Cash Ratio (Qtr) 0.38 1.22
Current Ratio Curr Ratio (Qtr) 0.57 2.59
Debt to Equity Ratio Debt/Equity (Qtr) -2.13 -0.96
Interest Cover Ratio Int Coverage (Qtr) 11.60 -14.20
Times Interest Earned Times Interest Earned (Qtr) 11.60 -14.20
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 32.20 -548.16
EBIT Margin % EBIT Margin % (Qtr) 24.54 -199.84
EBT Margin % EBT Margin % (Qtr) 22.42 -607.20
Gross Margin % Gross Margin % (Qtr) 80.60 51.88
Net Profit Margin % Net Margin % (Qtr) 19.90 -610.00