If you are bullish on Dropbox's business prospects, now may be a good time to start a position with the stock down so much from the start of November. Plus, with consistent share repurchases, which hit $181 million last quarter, Dropbox's share count should be down considerably over the next few years, which will increase free cash flow per share. At current prices, that would give the stock a single-digit P/FCF of 9. Longer-term, Dropbox thinks it can hit $1 billion in annual free cash flow by 2024. Management is guiding for $715 million in free cash flow this year, which would give the stock a price-to-free cash flow (P/FCF) ratio of 12.5, significantly below the market average. The stock now trades at a price-to-free cash flow ratio of 12.5. Backup and sync photos, docs, and other files to the cloud storage.
The results looked strong, so the sell-off probably came from broad market pressure on tech stocks. With Dropbox Cloud Drive, upload & transfer photos, documents, and files to the cloud. Now whatĭropbox has a market cap of $9 billion. Dropbox stock dropped 19.3 in November after Q3 earnings results. Either way, Dropbox stock is down significantly from the beginning of last month, even though its quarterly report beat expectations. There also could have been some profit-taking from traders with a shorter-term time horizon, as Dropbox stock was up approximately 30% year to date when it released its Q3 results. We can probably chalk this up to broad market selling pressure in technology and high-growth stocks, which Dropbox tends to get grouped into. With all these positive indicators, it's a bit surprising what Dropbox tanked almost 20% last month.
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