Dropbox, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

There's been a notable change in appetite for Dropbox, Inc. (NASDAQ:DBX) shares in the week since its annual report, with the stock down 18% to US$26.73. The result was positive overall - although revenues of US$2.5b were in line with what the analysts predicted, Dropbox surprised by delivering a statutory profit of US$1.40 per share, modestly greater than expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Dropbox

After the latest results, the consensus from Dropbox's eleven analysts is for revenues of US$2.48b in 2025, which would reflect a small 2.6% decline in revenue compared to the last year of performance. Per-share earnings are expected to accumulate 8.1% to US$1.58. In the lead-up to this report, the analysts had been modelling revenues of US$2.56b and earnings per share (EPS) of US$1.51 in 2025. If anything, the analysts look to have become slightly more optimistic overall; while they decreased their revenue forecasts, EPS predictions increased and ultimately earnings are more important.

There's been no real change to the average price target of US$29.21, with the lower revenue and higher earnings forecasts not expected to meaningfully impact the company's valuation over a longer timeframe. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Dropbox at US$34.00 per share, while the most bearish prices it at US$20.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that revenue is expected to reverse, with a forecast 2.6% annualised decline to the end of 2025. That is a notable change from historical growth of 8.4% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 12% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Dropbox is expected to lag the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Dropbox following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Even so, long term profitability is more important for the value creation process. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Dropbox going out to 2027, and you can see them free on our platform here..

You still need to take note of risks, for example - Dropbox has 2 warning signs (and 1 which is a bit unpleasant) we think you should know about.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.