Dropbox Stock Plunges After Weak Guidance

Dropbox (DBX) shares sank on Friday, February 23, 2025, following the company's financial report, which revealed weaker-than-expected guidance. The provider of cloud storage received downgrades from several analysts, including Bank of America Securities, Goldman Sachs, and JMP Securities. The stock plummeted more than 20% on the day, reaching a low of $24.80 at about 2:50 p.m. ET.

The downgrades came after Dropbox's fourth-quarter investor presentation, in which the company anticipated full-year revenue of $2.535 billion to $2.550 billion, short of analysts' forecasts. Bank of America Securities' Michael Funk downgraded Dropbox from Buy to Underperform and reduced the price target to $28 from $34 per share. Kash Rangan of Goldman Sachs cut Dropbox’s rating to Sell from Neutral and reduced the price outlook from $26 to $24 per share. Patrick Walravens of JMP Securities lowered his rating from Market Outperform to Market Perform, without a price target.

Dropbox stock was down 23.8% at $24.80 at about 2:50 p.m. ET, with today's big slide leaving the stock only slightly in positive territory for the past year. The company's shares had gained 11% this year and 35% in the past 12 months prior to the recent selloff.

Earlier in the day, Dropbox reported fourth-quarter earnings and sales that exceeded expectations. The company earned an adjusted 50 cents per share on sales of $635 million, compared to analysts' projections of 48 cents per share on sales of $632 million. However, the company's guidance for the current quarter and the full year was not as well-received by investors.




The recent downgrades and selloff in Dropbox's stock price suggest that investors are concerned about the company's growth prospects and the competitive landscape in the cloud storage market. While Dropbox's earnings results were positive, the company's guidance for the current quarter and the full year indicates that revenue growth may be slowing. This could be due to increased competition, market saturation, or other internal factors.

Dropbox's stock price has been volatile in recent months, and the company's shares are now trading at a significant discount to their 52-week high. However, the company's long-term prospects remain uncertain, and investors should closely monitor the company's financial performance and competitive position in the cloud storage market.

In conclusion, Dropbox's stock price plummeted following the company's weaker-than-expected guidance, leading to downgrades from several analysts. While the company's earnings results were positive, investors are concerned about the company's growth prospects and the competitive landscape in the cloud storage market. Dropbox's stock price has been volatile in recent months, and the company's long-term prospects remain uncertain. Investors should closely monitor the company's financial performance and competitive position in the cloud storage market.