Despite years of rapid revenue growth and reaching profitability, the future for this cloud-based storage provider is murky at best. The number of shares sold short has increased by 4% since last month. TOP COMPETITORS OF Dropbox IN Datanyze Universe . Figures 12 and 13 show what I think Salesforce should pay for Dropbox to ensure it does not destroy shareholder value. $8.82 billion Dropbox's valuation, as of July 2020 This scenario represents the minimum level of performance required not to destroy value. Figure 8: Dropbox’s Revenue and Core Earnings Since 2016, Dropbox Is Priced to Reach 44 Million Paying Users or 30% of Amazon Prime Members. Microsoft one drive is at 12.12%. Dropbox, Inc. write a review. No other competitors claimed more than 4% of the field. To justify its current price of $19/share, Dropbox must: See the math behind this reverse DCF scenario. In other words, executives are incentivized to focus on revenue, with little to no regard to the profitability of the firm. Dropbox (DBX) is a pioneer of cloud storage. Dropbox is one of the biggest names in cloud storage.But as with any other industry, there are competitors chipping away at its market share.Read on to learn more about Dropbox … Should the firm have its first earnings miss, investors could get spooked and send shares lower. By comparison, Google Cloud’s revenue increased 43% YoY in 2Q20, and Microsoft grew its commercial cloud revenue by 39% YoY over the same period. Figure 4 shows that Dropbox offers neither the most storage nor the cheapest storage (excluding free tiers). This adjustment represented 1% of reported net assets. Back up and sync docs, photos, videos, and other files to cloud storage and access them from any device, no matter where you are. 44 million paying users also translates to 2.5% of the global cloud storage market share. Access your phone’s notifications, calls, apps, photos & texts on your PC. Over half of Americans online have never used cloud storage service Dropbox hits 17% of market share with no associated content ecosystem. EY & Citi On The Importance Of Resilience And Innovation, Impact 50: Investors Seeking Profit — And Pushing For Change, Michigan Economic Development Corporation With Forbes Insights, Casey’s Stock Looks Expensive In the Long Run, Face Reality: Pit Yourself Against Nasdaq 100, Dow Jones Today: Stocks Erase Losses, Coronavirus Variant Vaccine Possible; Apple Thinking Of Apple Car, Apple’s Rumored EV Project Is A True Threat To Tesla’s Hype Machine, MDU Resources: Low Risk Bet On An Infrastructure Boom, Virus Stimulus Bill Mandates Pointless Pollution Study, Auto Retailer Drives Lower After Q3 Report, See the math behind this reverse DCF scenario, directly correlated with creating shareholder value, Competition deeply already integrated with target users, Doing the math: the stock price implies Dropbox can acquire 44 million paying users, equal to 30% of Amazon Prime members and 22% of Microsoft Office 365 subscribers, Grow revenue at 17% (vs. average consensus estimates from 2020 to 2022 of 12%) compounded annually over the next eight years, Immediately achieve a 7% (vs. Amazon’s TTM margin of 5%) NOPAT margin, Grow revenue at 11% (equal to 2021 consensus estimate) compounded annually over the next eight years, Immediately achieve a 4% NOPAT margin (double TTM margin of 2%), $864 million in operating leases (11% of market cap), $18 million in outstanding employee stock options (<1% of market cap), Deeply embedded competition with deeper pockets, Lack of significant and durable competitive advantages, Valuation implies massive paying user growth, PartnerSelect Smaller Companies Fund (MSSFX) – 2.7% allocation and unattractive rating, Catalyst Buyback Strategy Fund (BUYCX) – 2.6% allocation and very unattractive rating, Columbia Seligman Comm & Info Fund (SLMCX) – 2.0% allocation and unattractive rating, Columbia Seligman Global Technology Fund (SHGTX) – 2.0% allocation and unattractive rating. In this scenario, Dropbox grows revenue by 17% compounded annually for eight years and reaches $5.6 billion in revenue in 2027, or 7.5 times more than the $737 million of revenue Box generated over the TTM. Dropbox differentiated itself from Box by focusing on mass-market cloud storage while Box concentrated on helping businesses. MEGA is Cloud Storage with Powerful Always-On Privacy. Catalyst – Slowing Revenue Growth With Increased Expectations. The key variables are the weighted average cost of capital (WACC) and ROIC for assessing different hurdle rates for a deal to create value. Dropbox makes moving between personal, business, and enterprise-level plans easy by transferring your account to the new plan without changing file configurations.Google Drive for Business plans start at 30GB of storage per user at the Basic level, while Business and Enterprise plans give users unlimited storage with some extra features. 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