Dropbox DBX shares fell Friday as the file-hosting service’s fourth-quarter earnings report beat expectations but still drew mixed reactions from several analysts.
The stock recently traded at $23.77, down 2.5%. It has surged 27% over the past three months amid investor enthusiasm for enterprise-software companies. The Nasdaq Composite index has climbed 18% during that period.
Citigroup rates the stock a buy with a price target of $30. “DBX may remain out of favor” as investors now prefer growth names in the sector, Citi analysts wrote, according to Bloomberg.
But optimism for the company will emerge if it matches its earnings guidance this year, they said.
William Blair rates the San Francisco company outperform.
The firm notes that Dropbox’s revenue estimate lagged analyst forecasts. It’s trying to grow both revenue and profit, which may be difficult, Blair said, according to Bloomberg. “The burden of proof is on Dropbox management to convince skeptical investors that it can do so.”
Jefferies has a buy rating and a $28 price target. It said the stock is trading at a discount to its competitors. Dropbox “can deliver more leverage than guided to based on their historical precedence,” the investment firm said. Dropbox's sales forecast looks conservative, Jefferies analysts said.
RBC Capital Markets raised its price target to $28 from $25 and has an outperform rating.
“Dropbox reported a solid beat on revenue, and a strong one on margin,” RBC analysts wrote, according to Bloomberg. Average revenue per user continues to show strength, even though net user additions are decelerating, they said.