Here’s Why Dropbox Stock Price Exploded Higher Today

Shares of Dropbox are trading more than 15% higher in pre-market trading after the company’s fourth-quarter results showed that it beat market estimates on all fronts.

The company announced that it earned $0.16 per share in the fourth-quarter, which is higher than $0.14 expected from the market. Moreover, revenue came in at $446 million, beating analysts’ expectations of $443 million.

“Our strong Q4 marked the end of an exciting year for Dropbox as we launched our vision for the smart workspace,” said Dropbox Co-founder and Chief Executive Officer Drew Houston, who joined the board of Facebook earlier this month.

Revenue increased 19% in the quarter, which is in line with the expected growth. On an annual basis, Dropbox’s growth is around 20%.

“We closed the year with more than $1.6 billion in revenue, over 450,000 Dropbox business teams, and millions of people using our new foreground app that keeps Dropbox at the center of our users’ workflows. Moving into 2020, I’m confident in the team we have on board and the opportunity ahead,” added Houston.

The company beat market estimates for the “paying users” category as well, as it reported 14.3 million paying users compared to 14.2 expected from the market. For the third quarter, Dropbox reported 14.0 million users.

The beat was recorded in respect to guidance as well, as Dropbox expects $452 million to $454 million for the first quarter while analysts’ consensus was $448.4 million. Revenue for the full year is expected to range from $1.89 billion to $1.905, in line with market estimates of $1.9 billion.

Stock exceeds IPO sale price

Following the release of fourth-quarter earnings and future guidance, shares of Dropbox rose more than 15% in pre-market trading. The stock price is now trading above $21, which is the price at which the company sold shares in its initial public offering (IPO) in 2018.

Any move above $21.47 will mark a new 6-month high for the stock. For the following week, the target is $24,40 if the bulls can continue the positive momentum. The mid-term target is $26.20.

On the downside, the December low of $16.08 is also the all time low for the stock. Hence, the price is already trading nearly 35% higher compared to the December low.

Summary

Shares of Dropbox skyrocketed today after the tech giant released its fourth-quarter earnings, which beat analysts’ estimates on all fronts. The stock price is likely to put in a new 6-month high today.