Dropbox (DBX) is a Top-Ranked Growth Stock: Should You Buy?

Core Insights - The Zacks Premium service provides tools for investors to enhance their stock market strategies and confidence in investing [1] - Zacks Style Scores are indicators that help investors select stocks likely to outperform the market in the short term [2] Zacks Style Scores Overview - The Style Scores categorize stocks into four types: Value Score, Growth Score, Momentum Score, and VGM Score, each focusing on different investment strategies [3][4][5][6] - Value Score identifies undervalued stocks using financial ratios [3] - Growth Score assesses a company's financial health and future growth potential [4] - Momentum Score evaluates stocks based on price trends and earnings outlook [5] - VGM Score combines all three styles to provide a comprehensive assessment of stocks [6] Zacks Rank and Style Scores Interaction - The Zacks Rank is a proprietary model that uses earnings estimate revisions to help investors build successful portfolios [7] - Stocks rated 1 (Strong Buy) have historically outperformed the S&P 500, with an average annual return of +23.93% since 1988 [7] - Investors are encouraged to select stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B for optimal returns [9] - Stocks with lower ranks, even with good Style Scores, may still face declining earnings forecasts [10] Company Spotlight: Dropbox (DBX) - Dropbox operates a cloud-based platform with over 700 million registered users in approximately 180 countries [11] - Currently rated 3 (Hold) by Zacks, Dropbox has a VGM Score of A and a Growth Style Score of A, indicating potential for growth [11] - The company is projected to achieve a year-over-year earnings growth of 9.6% for the current fiscal year [11] - Recent earnings estimates for fiscal 2025 have been revised upward, with the Zacks Consensus Estimate increasing by $0.04 to $2.73 per share [12] - Dropbox has an average earnings surprise of +14.7%, making it a noteworthy option for investors [12]