Of course, management wants to continue releasing new features and developing new products, as well as improving existing ones and thereby attracting new users. For example, they can try to convert a user from a standard plan to an advanced plan. It's not exactly easy, but once the company has managed to convert a registered user to a paying user, it's very unusual for that user to stop using Dropbox and cancel their subscription.Īnother way to grow is to simply convert existing paying users to more expensive plans. Dropbox's management uses several methods to try and convert these registered users to paying ones. DBX has over 700 million registered users and only 17.37 million paying users. That's something I think represents a big opportunity. The first is to simply convert the registered users the company currently has into paying users. There are several strategies for how DBX management wants to grow its business. Data by YCharts How Dropbox Plans To Grow So let's focus on Dropbox's growth for now. This is something that most investors are not entirely satisfied with. The company's revenue is expected to grow in the high single digits in the coming years.
As a result, shares have not performed very well in recent years. That's why DBX shares don't get the attention they deserve. Most people out there think Dropbox is a "boring" company. Then there's the pretty big Wall Street disregard for DBX. Dropbox has successfully fought this competition so far and, thanks to prudent management, I believe it will continue to do so in the future. This is something that worries many investors. And it's not just any kind of competition - the company competes with Apple ( AAPL), Google ( GOOGL), and Microsoft ( MSFT). But we will talk about that later on.Īnother reason is that there's more and more competition. In 2022, however, the situation is completely different and DBX is undervalued in my opinion. For one, the stock was clearly overvalued at its all-time high in 2018. There are several reasons why Dropbox shares have lost over 48% since 2018.
Reasons Why Dropbox Is Down 48% Since 2018 Right now, DBX has over 700 million registered users and 17.37 million paying users. The company was founded in 2007 by Arash Ferdowsi and Andrew Houston, who is still the CEO today after 15 years. You can then use these links to share all kinds of files and folders with other people, without sending uncomfortably large attachments. About Dropboxįor those of you who don't know what Dropbox actually is, it's a cloud storage service that allows you to store various files online and then automatically sync them to your devices. The increasingly uncertain macroeconomic situation also made me make this purchase because I personally think that Dropbox is one of the less risky stocks. Due to this situation, I recently decided to buy DBX shares. In my opinion, Dropbox's management is doing a very good job and their business is still growing well. The stock has been going through rough times since its IPO, but that's something that can't be said about its core business. Since then, the company has nearly doubled its revenue and tripled its profits. Dropbox ( NASDAQ: DBX) shares have fallen 48% from their all-time high in 2018.
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