Discounted Cash Flow Calculation for NasdaqGS:DBX using 2 Stage Free Cash Flow to Equity Model
The calculations below outline how an intrinsic value for
is arrived at by discounting future cash flows to their present value using the 2 stage method.
We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.
NasdaqGS:DBX DCF 1st Stage: Next 10 year cash flow forecast
Amount off the current price
is available for.
Share price is
vs Future cash flow value of
Current Discount Checks
to be considered undervalued it must be available for at least 20% below the
current price. Less than 40% is even better.
Dropbox's share price is below the future cash flow value, and at a moderate discount (> 20%).
Dropbox's share price is below the future cash flow value, but not at a substantial discount (< 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for
it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing
when they are out of season, or how much your home is worth.
The amount the stock market is willing to pay for
is considered below, and whether this is a fair price.
Price based on past earnings
Dropbox's earnings available for a low price, and how does
this compare to other companies in the same industry?
Dropbox's earnings are expected to grow significantly at over 20% yearly.
Dropbox's revenue is expected to grow by 14% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can
be gauged below. We look back 3 years and see if they were any good at
predicting what actually occurred. We also show the highest and lowest estimates
looking forward to see if there is a wide range.
Dropbox's performance over the past 5 years by checking for:
Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the
industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the
past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent
earnings report. Some checks require at least 3 or 5 years worth of data.
has a total score of
0/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
Management is one of the most important areas of a company. We look at
unreasonable CEO compensation, how long the team and board of directors have
been around for and insider trading.
TENURE AS CEO
Mr. Andrew W. Houston also known as Drew, co-founded Dropbox Inc., and serves as its Chief Executive Officer and Member of Board of Directors since June 2007. He also serves as Chairman of Dropbox Inc. Mr. Houston is a founder of AppVirality Inc. He is a Member of Board of Overseers of Y Combinator Management LLC. He served as Special Advisor To The Board at HubSpot, Inc. until October 16, 2015. He holds a B.S. in Computer Science from Massachusetts Institute of Technology.
Insufficient data for Drew to compare compensation growth.
Insufficient data for Drew to establish whether their remuneration is reasonable compared to companies of similar size in United States of America.
Management Team Tenure
Average tenure and age of the
management team in years:
The tenure for the Dropbox management team is about average.
Co-Founder & Director
Senior Vice President of Engineering
Chief Financial Officer
Chief Accounting Officer
Head of Investor Relations
Vice President of Communications
Vice President of People
Chief Customer Officer
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The tenure for the Dropbox board of directors is about average.
What Kind Of Shareholders Own Dropbox Inc (NASDAQ:DBX)?
Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. … We'd expect to see both institutions and retail investors owning a portion of the company. … institutional investors have bought into the company
All You Need To Know About Dropbox Inc's (NASDAQ:DBX) Financial Health
DBX’s financial liquidity and debt position will be analysed in this article, to get an idea of whether the company can fund opportunities for strategic growth and maintain strength through economic downturns. … Don’t forget that this is a general and concentrated examination of Dropbox's financial health, so you should conduct further analysis. … Check out our latest analysis for Dropbox
Who Are The Largest Shareholders In Dropbox Inc (NASDAQ:DBX)?
Today, I will be analyzing Dropbox Inc’s (NASDAQ:DBX) recent ownership structure, an important but not-so-popular subject among individual investors. … The impact of a company's ownership structure affects both its short- and long-term performance. … Differences in ownership structure of companies can have a profound effect on how management's incentives are aligned with shareholder returns, and whether they adhere to corporate governance best practices.
Is Dropbox Inc (NASDAQ:DBX) A Financially Sound Company?
Big corporations are much sought after by risk-averse investors who find diversified revenue streams and strong capital returns attractive. … Let’s take a look at Dropbox’s leverage and assess its financial strength to get an idea of their ability to fund strategic acquisitions and grow through cyclical pressures … Note that this commentary is very high-level and solely focused on financial health, so I suggest you dig deeper yourself
Are Dropbox Inc's (NASDAQ:DBX) Interest Costs Too High?
Moreover, DBX has generated US$330.30M in operating cash flow over the same time period, resulting in an operating cash to total debt ratio of 158.19%, signalling that DBX’s current level of operating cash is high enough to cover debt. … DBX’s level of debt is appropriate relative to its total equity, at 33.32%. … Next Steps: DBX has demonstrated its ability to generate sufficient levels of cash flow, while its debt hovers at an appropriate level.
The latest earnings announcement Dropbox Inc's (NASDAQ:DBX) released in December 2017 indicated company earnings became less negative compared to the previous year's level as a result of recent tailwinds Today I want to provide a brief commentary on how market analysts view Dropbox's earnings growth outlook over the next couple of years and whether the future looks brighter. … Check out our latest analysis for Dropbox Analysts' outlook for this coming year seems pessimistic, with earnings becoming even more negative, generating -US$579.88M in 2019. … The slope of this line is the rate of earnings growth, which in this case is 75.54%.
Dropbox, Inc. provides a collaboration platform worldwide. Its platform allows individuals, teams, and organizations to collaborate and sign up for free through its Website or app, as well as upgrade to a paid subscription plan for premium features. The company has approximately 500 million registered users across 180 countries. The company was formerly known as Evenflow, Inc. and changed its name to Dropbox, Inc. in October 2009. Dropbox, Inc. was founded in 2007 and is headquartered in San Francisco, California.
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