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Dropbox: Navigating The Crossroads Of Value Potential And Slowing Growth

May 28, 2023 11:01 AM ETDropbox, Inc. (DBX)AAPL, GOOG, GOOGL, MSFT10 Comments
FinanzUni profile picture


  • Dropbox displays strong free cash flow but faces slowing growth, evident from the 8.7% YoY revenue growth in Q1 2023.
  • Positioned as a potential value stock, Dropbox grapples with maintaining growth amid fierce competition and a slowing core product.
  • The company's survival strategy hinges on diversifying product offerings and continuing to innovate in the face of tech giants.
  • Dropbox's future hinges on achieving ambitious targets including sustaining a ~7% p.a. growth rate and generating $1 billion in Free Cash Flow by 2024.

Dropbox Debuts On Nasdaq Exchange

Drew Angerer

In the rapidly evolving world of technology, the story of Dropbox (NASDAQ:DBX) represents an intriguing puzzle for investors, analysts, and industry watchers alike. A stalwart of the industry, Dropbox is known for generating robust free cash flow, a testament to its

This article was written by

FinanzUni profile picture
I started FinanzUni with the goal to give fellow investors access to objective and balanced analysis. I value all outside intel and everyone to challenge my thesis to obtain the most critical and correct analysis.My investment focus is on growth stocks with an investment horizon of 2–5 years. My primary focus here is on Tech stocks, but more broadly on emerging great ideas and stocks. About me: I am a recent grad student from UC Berkley and after finishing my studies I have returned to my home country Germany to work in venture capital.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (10)

Zetetic always profile picture
I just had a look at $DBX. Why doesn't anyone point out the egregious stock based compensation? Management works for themselves, not the shareholder. Disgusting...
ghrelin profile picture
@Zetetic always yea that's why i didnt buy it. Their SBCs are insane
banmate6 profile picture
I just sold DBX.

date shares total_price $/share
15-Sep-2020 150 $3,069.0000 $20.4600

My $3,069.0000 was sold at $23/share, for $3,450.00, with a $0.05 fee, worth $3,449.9500. A 12.41% gain on 4.42% CAGR. It played the role of a decent bond.

I sold because I don't see a compelling story. Revenue is rising nicely, but competition by heavies like AAPL, GOOG, MSFT, and AMZN seems too much. I think there are better ways to allocate this capital.

I'm looking to add to beaten up TSN. Maybe STWD, other REITS in a a beaten up real estate sector facing commercial real estate paradigm shifts.
ghrelin profile picture
@banmate6 REITs haven't faced the meat grinder yet...let's see which ones don't make it out of the bullet payments due next fall. should be a show.
banmate6 profile picture

You probably are right. I’m on REIT articles and hearing similar.

Charlie Munger and Barbara Corcoran also said more pain is coming. I live in San Francisco and know it will get worse.

As always, I’m aiming for a near bottom. Looking for alpha.
ghrelin profile picture
@banmate6 oh wow! hopefully you rent and can move. You'd like florida. Be surprised how cheap it is and how much you save in taxes. stay safe
ghrelin profile picture
They have a real problem with large amounts of SBC to their executives, otherwise i would have bought it in 2021. I'm glad I didn't because AI and the growing cloud market make this a huge sell. In 2021 it was good value and seemed primed for being an acquisition target for a google or microsoft or adobe etc. Good product, but bad management.
GuyPardon profile picture
I use their products. Bought some shares in 2020 and then sold it because it’s not a killer stock. They are forced to navigate between the big players and their OSes. No real market power so far (that I can see). Or none that the market recognised in the last 5 years.
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