BOX - Dropbox stock surges 8% as Wall Street praises strong Q1 outlook

2023-05-05 11:54:52 ET

Dropbox ( NASDAQ: DBX ) shares surged nearly 8% on Friday after the cloud storage provider reported first-quarter results and guidance for the coming period that was well received by investors and analysts alike.

Monness, Crespi, Hardt analyst Brian White, who has a neutral rating on Dropbox ( DBX ), noted that the tone on the earnings call was "relatively constructive," even as the company deals with weakness in its Teams plans. However, he expressed caution, especially in light of the ongoing economic uncertainty.

"Given the longer-term implications around the evolution of work, the stock’s modest valuation, a generous stock repurchase program, and margin expansion, Dropbox may appeal to value investors; however, revenue growth trends have been uninspiring, and we believe the darkest days of this downturn are ahead of us," White wrote in an investor note.

Shares of Box ( BOX ), which competes with Dropbox ( DBX ), also rose on back of the results.

During the first-quarter, Dropbox ( DBX ) said it earned an adjusted 42 cents per share on $611.1M, topping estimates of 36 cents per share and $601M in sales.

It ended the period with 17.9M paying users, up from 17.09M in the year-ago period and average revenue per user rose to $138.97 from $134.63 in the same period last year.

Looking ahead, Dropbox ( DBX ) expects second-quarter sales to be between $612M and $615M, with the consensus estimate at $613.5M. The company also tweaked its full-year outlook, as it now expects sales to be between $2.47B and $2.485B, down from a prior range of $2.475B to $2.49B.

More on Dropbox

• Dropbox may see 'slight acceleration' in Q1 sales growth, Monness, Crespi, Hardt
• Seth Klarman's Baupost adds Herbalife, Altice USA, exits Dropbox, Enhabit
• Dropbox acquires FormSwift for $95M in cash

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