Dropbox to Report Q4 Earnings: To Buy or Not to Buy the Stock?

Dropbox DBX is scheduled to release fourth-quarter 2024 results on Feb. 20.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.DBX expects fourth-quarter 2024 revenues between $637 million and $640 million. The Zacks Consensus Estimate for fourth-quarter revenues is pegged at $638.53 million, indicating year-over-year growth of 0.6%.The consensus mark for earnings is pegged at 62 cents per share and has been unchanged over the past 30 days. The figure indicates a 24% increase from the year-ago quarter’s reported figure.Dropbox, Inc. Price and EPS Surprise  Dropbox, Inc. price-eps-surprise | Dropbox, Inc. QuoteDBX’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the earnings surprise being 13.33%, on average.Let us see how things have shaped up prior to the upcoming announcement.Key Factors to Consider for DBX’s Q4 EarningsThrough Dropbox's ongoing efforts to refine core FSS offerings and prioritize user experience and retention, the company aims to address the evolving needs of users while solidifying Dropbox’s competitive edge in the cloud storage and collaboration market. These enhancements are expected to have contributed positively to the company's performance in the to-be-reported quarter.DBX’s AI-powered flagship product, Dash, plays a key role in driving growth by addressing the needs of 1 billion knowledge workers dealing with information overload. With more than 500,000 business accounts, DBX is strategically positioned to expand Dash’s reach. The company expects Dash to boost ARPU, which is likely to have benefited its performance in the fourth quarter.Dropbox's fourth-quarter 2024 performance is expected to have benefited from the projection of expanding operating margin, which is anticipated to be 36% compared with the previously mentioned 33.5-34%. This improved margin projection indicates enhanced operational efficiency and effective cost management, driving higher profitability for the quarter under review.The company invested in its document workflow products, aiming to streamline processes and increase efficiency for users. By addressing common pain points in document management, Dropbox sought to enhance customer satisfaction and drive the adoption of its services. Progress in these areas is expected to have continued in the fourth quarter of 2024.However, DBX is likely to have faced challenges in the fourth quarter due to near-term down-sell risks with some of its larger Teams accounts, coupled with seasonal pressures from FormSwift. These factors are expected to have affected the paying user count, resulting in a modest sequential drop in the overall paying user base in the quarter under review.What Our Model SaysPer the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the exact case here.DBX currently has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.Should You Buy or Hold Dropbox’s Stock?The company's fourth-quarter 2024 earnings are expected to have benefited from a strong margin view and continued product expansion, which are likely to have driven profitability.However, concerns over user growth and potential down-sell risks may impact Dropbox's future performance, making it a risky buy for investors.Stocks to ConsiderHere are some companies worth considering, as our model shows that these have the right combination of elements to beat on earnings this time around:Autohome ATHM has an Earnings ESP of +7.27% and a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.ATHM shares have gained 15.9% year to date. Autohome is set to report its fourth-quarter fiscal 2024 results on Feb. 20.Opera Limited OPRA presently has an Earnings ESP of +8.70% and a Zacks Rank #3.Opera shares have returned 15.4% year to date. OPRA is set to report fourth-quarter 2024 results on Feb. 27.Marvell Technology MRVL currently has an Earnings ESP of +2.77% and a Zacks Rank #2.MRVL shares have declined 3.6% year to date. Marvell Technology is set to report fourth-quarter fiscal 2025 results on March 05.Just Released: Zacks Top 10 Stocks for 2025Hurry – you can still get in early on our 10 top tickers for 2025. Handpicked by Zacks Director of Research Sheraz Mian, this portfolio has been stunningly and consistently successful. From inception in 2012 through November, 2024, the Zacks Top 10 Stocks gained +2,112.6%, more than QUADRUPLING the S&P 500’s +475.6%. Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2025. You can still be among the first to see these just-released stocks with enormous potential. See New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Marvell Technology, Inc. (MRVL): Free Stock Analysis Report Autohome Inc. (ATHM): Free Stock Analysis Report Dropbox, Inc. (DBX): Free Stock Analysis Report Opera Limited Sponsored ADR (OPRA): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks