Key Takeaways
- Dropbox shares sank Friday as several analysts reduced their ratings on the stock following the company's financial report.
- The provider of cloud storage received downgrades from Bank of America Securities, Goldman Sachs, and JMP Securities.
- The reductions came after Dropbox gave 2024 revenue guidance that missed estimates.
Shares of Dropbox (DBX) plummeted more than 20% Friday after several analysts downgraded thecloud storage provider following its weaker-than-expected guidance.
On Thursday, the company's fourth-quarter investor presentation explained that Dropbox anticipates full-year revenue of $2.535 billion to $2.550 billion, short of forecasts.
Bank of America Securities’ Michael Funk downgraded Dropbox from Buy to Underperform. He also reduced the price target to $28 from $34per share. Funk said that the “DBX bull thesis has played out.” He said that “yesterday’s results, guidance, and commentary suggest a negative inflection of DBX's risk/reward profile.”
Kash Rangan of Goldman Sachs cut Dropbox’s rating to Sell from Neutral, reducing the price outlook from $26 to $24 per share. Rangan noted that he wanted to see the company have a re-acceleration of growth, a stronger small- and medium-sized business environment, and artificial intelligence (AI) proof points.
JMP Securities’ Patrick Walravens lowered his rating from Market Outperform to Market Perform, without a price target. He expressed concerns about the firm’s decline in annual recurring revenue and number of paying users. Walravens added that those issues raise questions about the company's durability.
Dropbox stock was down 23.8% at $24.80 at about 2:50 p.m. ET. With today's big slide, Dropbox shares are only slightly in positive territory for the past year.
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