Dropbox badly needs to deliver today

Following a stellar IPO performance earlier on March 23, cloud specialist Dropbox (DBX) is all set to report first-quarter results after the closing bell today. As for all new public–listed companies, Dropbox faces an uphill task of pleasing investors and keeping up its growth momentum. And to achieve that, it is quite necessary for the company to beat market consensus.

The debut quarterly result is a risky affair. While it is packed with immense public interest, missing expectations may even take away all the gains achieved during the IPO. Dropbox definitely wouldn’t want to go the way of Spotify (SPOT) or Snap (SNAP). Even after posting results in line with market consensus as well as the company’s own predictions, investors brutally sent Spotify shares tumbling 8% after the debut earnings results on May 2. Investors are looking for nothing short of a blowout performance in the very first quarter.

Meanwhile, Snap had had a terrible run at the stock market since missing analyst consensus altogether in the maiden quarter as a public company. The stock is currently trading way below its IPO price.

Dropbox delivered a kickass IPO performance in March and started trading at $21, above the updated price range. The stock currently trades at $31.78 and has a price target of $33.15. According to analysts’ consensus, the cloud storage firm is projected to report non-GAAP EPS of $0.04 per share, on revenue of $309.2 million in the first quarter.

Also keep a tab on average revenue per user, a key metric for companies in the tech realm, which is estimated to see a growth of 2% year-over-year during the quarter.

According to analysts’ consensus, the cloud storage firm is projected to report non-GAAP EPS of $0.04 per share, on revenue of $309.2 million in the first quarter.  

In the long term, Dropbox has a tough road ahead, given the tight competition in the cloud space from a long list of competitors including Alphabet (GOOGL), Box (BOX), Microsoft (MSFT), Amazon (AMZN), Alibaba (BABA) and IBM (IBM). While Dropbox has so far managed to outperform the biggies, only constant innovation will help the company keep its share of the cloud market.