Conversely, DocuSign trades at stratospheric P/E levels that are not worth mentioning.ĭropbox’s strategy of moving its users from its basic offering to its its team solutions should cause its paid user base to climb further. Investors who think Dropbox’s e-signing solution is comparable to DocuSign may buy Dropbox stock instead of DOCU stock.ĭropbox trades at a forward price–earnings ratio of around 20 times. HelloSign, an e-signature and document workflow company that Dropbox acquired, could take on DocuSign (NASDAQ: DOCU). Chief Accounting Officer Tim Regan said that the conversion rates of free-trial participants to paid users have remained steady. Opportunityĭropbox reported that the number of individuals trying out its product rose 20% relative to pre-Covid levels. Without a moat, Dropbox’s revenue growth may decline in future quarters. Moreover, Microsoft’s Office 365 includes a powerful productivity suite of solutions alongside its shared storage space. Specifically, Dropbox’s desktop app shows recent activity and lets users quickly access files while enabling members of their team to comment on files. Plus, both mega-cap firms offer better work-collaboration tools than Dropbox. For example, Alphabet’s (NASDAQ: GOOG) Google Drive and Microsoft (NASDAQ: MSFT) OneDrive look the same as Dropbox’s storage solution. Investors might be worrying that competing offerings will badly hurt Dropbox in the future. Despite the strong results, many investors sold Dropbox stock. Its paying user base increased from 13.6 million in Q2 of 2019 to 15 million last quarter. It posted earnings per share of 22 cents, exceeding analysts’ average estimate.įurther, Dropbox’s margins expanded YOY in Q2, while its annual recurring revenue rose 17% YOY to $1.931 billion. The company’s revenue climbed 16.4% year-over-year to $467.4 million. After the Q2 earnings report, investors sold off the shares, as you can see from the chart from Stock Rover below. Besides a rebound by technology stocks, what will it take for Dropbox to end its downturn which started in June? Dropbox Stock Falls After Hitting Multiple Topsĭropbox tried, but failed, to break out above the $23.00-$24.00 level earlier this year.
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