Dropbox (DBX) registers a bigger fall than the market: Important facts to note

In the latest trading session, Dropbox (DBX) closed at $26.75, marking a -2.12% move from the previous day. This move lagged the S&P 500's daily loss of 0.19%. On the other hand, the Dow registered a loss of 0.8%, and the technology-centric Nasdaq decreased by 0.1%.

Shares of the online file-sharing company have depreciated by 1.9% over the course of the past month, underperforming the Computer and Technology sector's gain of 2.62%, and the S&P 500's gain of 2.26%.

The investment community will be paying close attention to the earnings performance of Dropbox in its upcoming release. The company is predicted to post an EPS of $0.66, indicating a 9.59% decline compared to the equivalent quarter last year. Meanwhile, our latest consensus estimate is calling for revenue of $627.51 million, down 2.5% from the prior-year quarter.

For the full year, the Zacks Consensus Estimates project earnings of $2.82 per share and a revenue of $2.51 billion, demonstrating changes of +13.25% and 0%, respectively, from the preceding year.

It's also important for investors to be aware of any recent modifications to analyst estimates for Dropbox. These recent revisions tend to reflect the evolving nature of short-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Dropbox is currently sporting a Zacks Rank of #3 (Hold).

From a valuation perspective, Dropbox is currently exchanging hands at a Forward P/E ratio of 8.93. For comparison, its industry has an average Forward P/E of 18.26, which means Dropbox is trading at a discount to the group.

One should further note that DBX currently holds a PEG ratio of 1.45. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. As of the close of trade yesterday, the Internet - Services industry held an average PEG ratio of 1.78.

The Internet - Services industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 78, positioning it in the top 32% of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.