DBX - Dropbox may show 'modest' slowdown in growth but focus is on AI: analyst
2023-07-28 12:18:13 ET
Storage software provider Dropbox ( NASDAQ: DBX ) is slated to report second-quarter results on August 3 and investment firm Monness, Crespi, Hardt is forecasting a "modest" slowdown in growth, with additional focus on the company's artificial intelligence initiatives.
Analyst Brian White, who has a neutral rating on Dropbox ( DBX ) shares, is expecting revenue to come in at $618M, up 8% year-over-year, down from the 9% growth seen in the first-quarter. He's expecting earnings of 47 cents per share, above the Wall Street consensus of 46 cents per share.
"Given the longer-term implications around the evolution of work, the stock’s modest valuation, a generous stock repurchase program, cost reduction initiatives, and margin expansion, Dropbox may appeal to value investors; however, revenue growth trends have been uninspiring, competition fierce, and we believe the darkest days of this downturn are ahead of us," White wrote in an investor note.
Concerning AI, the company's restructuring plan ( announced in April) and a new venture fund, White is expecting some long-term benefits for Dropbox ( DBX ).
"Dropbox highlights the time saving benefits of Dropbox AI," White wrote of the company's June announcements , which the company has positioned as allowing customers to "quickly" understand large documents or files without going through the entire file.
Looking ahead, White is expecting third-quarter revenue to rise 7% year-over-year to $631M, with full-year revenue to come in at $2.51B, up 8% year-over-year, with earnings of $1.92 per share.
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Dropbox may show 'modest' slowdown in growth, but focus is on AI: analyst