Don’t Drop Those Dropbox Shares; No-Moat Dropbox Ticks Off Fiscal 2022 With Strong Financial Results

We are maintaining our $26 fair value estimate for no-moat Dropbox as the firm checked off fiscal 2022 with a strong set of financial results, marginally above our expectations. Despite a tough macroeconomic backdrop, Dropbox’s top line continued to show resilience. We continue to have a positive view of Dropbox’s transition away from commoditized cloud storage by incorporating more content collaboration products into its arsenal. With a broader set of offerings, we believe the firm can unlock greater cross-selling opportunities along with more venues for new customers to land within Dropbox’s suite of offerings. With shares trading flat after hours, we view Dropbox as fairly valued.