Founded 15 years ago, Dropbox now has a presence in 180 countries and serves around 700 million users. What makes the company special?
Dropbox is a cloud storage and file sharing service that allows users to store, access, and manage their files, documents, and other digital content on remote servers and access them from anywhere. It provides users with a simple and convenient way to store, sync, and share their files across multiple devices, including computers, tablets, and smartphones.
Users can easily access and edit their files from any device with an internet connection, and they can also share files with others by sending them a link.
Dropbox also offers a range of features and tools, such as file versioning, collaboration, and security, to help users manage and protect their digital content.
How Is Dropbox Different?
Dropbox is firmly entrenched with a wide customer base, but it’s not without significant competition. Google Drive, Box, iCloud, and Microsoft OneDrive are all competitors, featuring cloud storage and file sharing services that allow users to store, access, and manage their files, documents, and other digital content on remote servers and access them from anywhere.
However, there are some key differences between these services:
- Storage: Dropbox, Google Drive, Box, and OneDrive offer a range of storage options, ranging from free basic plans to paid plans with more storage space. iCloud is primarily a storage service for Apple users and is integrated with Apple’s other products and services.
- Compatibility: Dropbox, Google Drive, Box, and OneDrive are compatible with a wide range of devices and platforms, including computers, tablets, and smartphones running various operating systems. iCloud is primarily designed for use with Apple products, such as iPhones, iPads, and Macs.
- Features: Each of these services offers a range of features and tools, such as file versioning, collaboration, and security. However, the specific features and tools offered by each service vary. For example, Google Drive integrates with Google’s suite of productivity tools, such as Docs, Sheets, and Slides, while iCloud integrates with Apple’s productivity and entertainment services, such as iCloud Photos and Apple Music.
The flexibility and compatibility of Dropbox contributes to its massive customer base and that in turn has led to exceptional share price performance this year.
Dropbox Beating The Market
At the time of research, Dropbox was down just 7% for the year versus the S&P 500, which declined by a smidge under 20%. Why is the company beating the market?
In its Q3 earnings report, management reported ARR up by 9.6% versus the same quarter last year. Non-GAAP operating income rose 16% to $187 million.
When we ran the number on a discounted cash flow forecast analysis, we arrived at an upside target to $28 per share, suggesting close to 20% from current levels.
For the bulls there’s lots to cling to:
- Management buying back shares
- Strong cash flows
- Industry leading brand
And for a still-growing tech firm, the P/E of 23x is quite enticing. Best of all, users production of data is likely to grow exponentially over time, which in turn should result in ever more payments and dependency on Dropbox. Combined those reasons mean whether economics booms or busts take hold, Dropbox should be resilient.