2024-02-18 20:04:26 ET
Summary
- Dropbox stock dropped more than 20% after Q4 results, a result of the company's slowing top-line growth and heightened churn.
- The company also pulled back on its long-term FCF target for FY24, which formed the basis for its valuation for many investors.
- Its AI product, Dropbox Dash, is not generating significant acceleration in revenue, and its bundled offerings are showing weaker traction.
- Though still cheap at <10x FY24 FCF, Dropbox will have a long road to recovery ahead.
When the stock market is priced this high, execution has to be near perfect in order for rallies to keep continuing - and in the case of Dropbox ( DBX ), the file storage and sharing company's journey over the past year has been anything but perfect....
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Dropbox: Time To Take Caution (Rating Downgrade)