– Dropbox – cloud storage solutions.
– A largely stale short report and sell rating from a leading bank has created an attractive contrarian setup.
– Growth is set to reaccelerate in 2H’22 on the back of recent 20% price increases.
– Successful execution of the pricing increase will also debunk the short thesis that cloud storage is a commodity product while $GOOG, $APPL, and $MSFT are giving it away for free.
– Consensus estimates are too low and remain below the mid-point of mgmt’s LT guidance. Several paths to push Dropbox back to double-digit revenue growth.
– Set to achieve $574bn of FCFE in 2024.
– 25x multiple and 9% discount rate, results in $38/share price target today.
Exp. gain: +76% to $38.
Full DBX write-up (free guest account required):