Why Dropbox (DBX) Might be Well Poised for a Surge

Dropbox (DBX) appears an attractive pick given a noticeable improvement in the company's earnings outlook. The stock has been a strong performer lately, and the momentum might continue with analysts still raising their earnings estimates for the company.The rising trend in estimate revisions, which is a result of growing analyst optimism on the earnings prospects of this online file-sharing company, should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- is principally built on this insight.The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.For Dropbox, strong agreement among the covering analysts in revising earnings estimates upward has resulted in meaningful improvement in consensus estimates for the next quarter and full year.Current-Quarter Estimate RevisionsThe company is expected to earn $0.62 per share for the current quarter, which represents a year-over-year change of +24%.The Zacks Consensus Estimate for Dropbox has increased 39.74% over the last 30 days, as three estimates have gone higher compared to no negative revisions.Current-Year Estimate RevisionsFor the full year, the company is expected to earn $2.39 per share, representing a year-over-year change of +20.71%.In terms of estimate revisions, the trend for the current year also appears quite encouraging for Dropbox. Over the past month, four estimates have moved higher compared to no negative revisions, helping the consensus estimate increase 13.74%.Favorable Zacks RankThe promising estimate revisions have helped Dropbox earn a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.Bottom LineDropbox shares have added 7.2% over the past four weeks, suggesting that investors are betting on its impressive estimate revisions. So, you may consider adding it to your portfolio right away to benefit from its earnings growth prospects.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>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 Dropbox, Inc. (DBX): 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