Dropbox‘s (NASDAQ: DBX) expanding AI-powered product portfolio has been playing a key catalyst in driving up the paid user base. It exited the first quarter of 2024 with 18.16 million paying users, marking sequential growth of roughly 35,000. As of Mar 31, 2024, DBX had more than 700 million registered users.
Dropbox’s strategy of leveraging AI to develop products that organize all cloud content is a positive. Its long-term growth prospect is driven by a strong partner base that includes the likes of Google, Slack, Adobe, Atlassian, Zoom, Microsoft (NASDAQ: MSFT), Salesforce and NVIDIA (NASDAQ: NVDA).
However, the current level at which DBX shares are trading doesn’t reflect these positive factors in our view. Shares have declined 24.5% year to date, underperforming the broader Zacks Computer & Technology sector’s return of 15.2% and the Zacks Internet Services’ growth of 18.9%.
Dropbox’s closing price of $22.27 on Jun 3 is closer to the lower end of the 52-week range of $22.04-$33.43, reflecting ample room for upside.
DBX is trading at a significant discount with a forward 12-month …
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