Dropbox, Inc. Fundamental Analysis (NASDAQ: DBX)
Dropbox, Inc. (NASDAQ: DBX) shows weak financial fundamentals with a PE ratio of 18.53, profit margin of 18.71%, and ROE of -28.45%. The company generates $2.7B in annual revenue with weak year-over-year growth of -1.07%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 36.9/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze DBX's fundamental strength across five key dimensions:
Efficiency Score
ExcellentDBX demonstrates superior asset utilization.
Valuation Score
ExcellentDBX trades at attractive valuation levels.
Growth Score
ModerateDBX shows steady but slowing expansion.
Financial Health Score
ExcellentDBX maintains a strong and stable balance sheet.
Profitability Score
ModerateDBX maintains healthy but balanced margins.
Key Financial Metrics
Is DBX Expensive or Cheap?
P/E Ratio
DBX trades at 18.53 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, DBX's PEG of 0.92 indicates potential undervaluation.
Price to Book
The market values Dropbox, Inc. at -4.01 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 6.79 times EBITDA. This is generally considered low.
How Well Does DBX Make Money?
Net Profit Margin
For every $100 in sales, Dropbox, Inc. keeps $18.71 as profit after all expenses.
Operating Margin
Core operations generate 26.84 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $-28.45 in profit for every $100 of shareholder equity.
ROA
Dropbox, Inc. generates $15.59 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Dropbox, Inc. generates strong operating cash flow of $1.08B, reflecting robust business health.
Free Cash Flow
Dropbox, Inc. generates strong free cash flow of $1.06B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $4.17 in free cash annually.
FCF Yield
DBX converts 11.20% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
18.53
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.92
vs 25 benchmark
P/B Ratio
Price to book value ratio
-4.01
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.45
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
-1.99
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.23
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
-0.28
vs 25 benchmark
ROA
Return on assets percentage
0.16
vs 25 benchmark
ROCE
Return on capital employed
0.37
vs 25 benchmark
How DBX Stacks Against Its Sector Peers
| Metric | DBX Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 18.53 | 36.60 | Better (Cheaper) |
| ROE | -28.45% | 654.00% | Weak |
| Net Margin | 18.71% | -129691.00% (disorted) | Strong |
| Debt/Equity | -1.99 | 0.27 | Strong (Low Leverage) |
| Current Ratio | 1.23 | 5.91 | Neutral |
| ROA | 15.59% | 235.00% | Weak |
DBX outperforms its industry in 3 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Dropbox, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
103.40%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
406.30%
Industry Style: Growth, Innovation, High Beta
High GrowthFCF CAGR
157.49%
Industry Style: Growth, Innovation, High Beta
High Growth