Dropbox (NASDAQ: DBX) is a big name when it comes to online storage solutions, but its recent results have cast a cloud over just how much growth the company may be able to generate. But with the stock down more than 20% since July, Dropbox is not too far away from its 52-week low, and this could be a good opportunity to buy it on a dip. Let's take a look at how the company has been doing of late to see whether it's a good buy today or if its recent decline could be the start of a much bigger sell-off.
It was back in August that the wheels started to come off for Dropbox. Despite the company beating expectations for Q2, the big concern for investors was that Dropbox wasn't generating enough growth, specifically among paid users. With a 3% increase in paying users from Q1 and a 14% improvement from the prior year, the company has continued to show good, modest growth.
The one metric in Q2 that the company did miss estimates on was average revenue per user. During the quarter, Dropbox averaged $120.48, compared to expectations of $120.8. While this may seem like a minimal miss, the problem is that with the company's net loss growing from $4.1 million a year ago to $21.4 million, a lot is going to have to go right for Dropbox to be able to reach breakeven anytime soon.