Is Dropbox, Inc. (DBX) overvalued or undervalued?
Updated Nov 10, 2026 · hand-researched model · educational, not advice
At a recent price of $32.58, Dropbox, Inc. (DBX) sits inside our range of estimates: our valuation lenses put the business somewhere between $25.21 and $67.91 per share. For a cyclical we value through the cycle we publish a range only (peer multiples and our researched mid-cycle DCF): where in the cycle the business sits decides where in that range it lands, and a single figure would claim we know that precisely. This is an educational model, not a price target or a recommendation.
The valuation discounts Dropbox, Inc.'s projected free cash flows at a weighted-average cost of capital (WACC) of 8.4%, with a long-run terminal growth rate of 2.0%. About 73% of the enterprise value comes from the terminal value — the portion beyond the explicit forecast window — which is typical for a stable, cash-generative business and a reminder that small changes in the discount rate or terminal growth assumption swing the intrinsic value meaningfully.
Running the DCF in reverse — solving for the growth the current price already assumes — the market is implying roughly 5.7% annual revenue growth for DBX. Our base case instead compounds to about 0.6% a year over the same forecast, so the market is pricing in materially faster growth than our base case. The reverse-DCF is a quick sanity check: it reframes 'is this stock cheap?' as 'do I believe the growth the price requires?' rather than arguing over a single point estimate of fair value.
Sensitivity matters more than any single number. Across a reasonable band of discount-rate assumptions, DBX's modeled DCF value ranges from about $15.93 to $46.15 per share. If that range still sits below today's price, the market is optimistic relative to the model across the whole band; if it brackets the price, the stock is roughly fairly valued on our assumptions. Use the interactive slider to see exactly where your own cost-of-capital view lands.
How to read this page: the DCF fair value is what Dropbox, Inc. would be worth if its cash flows grow as modeled and are discounted at the stated WACC. The assumptions table shows every input and its source; the reverse-DCF shows what the market believes; the sensitivity band shows how fragile the answer is. None of this is investment advice — it is a transparent, auditable framework for forming your own view of DBX's intrinsic value. Figures update as new filings and prices come in.
The assumptions behind DBX's DCF
| Input | Value | Source |
|---|---|---|
| Base-year revenue | $2,521,000,000 | Dropbox FY2025 10-K (accession 0001467623-26-000008, filed 2026-02-20): us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax, FY2025 = $2,521.0M, -1.1% on FY2024 $2,548.2M (+0.2% excluding FormSwift, the e-signature/forms business Dropbox is winding down by end-2026; -1.2% in constant currency). Calendar fiscal year. Three-year shape: $2,501.6M (FY2023) -> $2,548.2M -> $2,521.0M, i.e. flat. CROSS-CHECK: H1 2026 revenue $1,261.0M, +0.85% on H1 2025 $1,250.4M; TTM to 2026-06-30 $2,531.6M. Q2 2026 was +0.9% reported but only +0.1% in constant currency excluding FormSwift - the reported growth is mostly a weaker dollar. |
| Base EBIT margin | 27.3% | Dropbox Q4/FY2025 results release, 8-K Ex-99.1 (accession 0001467623-26-000003, filed 2026-02-19); FY2025 10-K (accession 0001467623-26-000008): GAAP income from operations $689.1M / revenue $2,521.0M = 27.33% (us-gaap:OperatingIncomeLoss). This is AFTER $300.8M of stock-based compensation (11.9% of revenue), $23.6M of acquired-intangible amortization, $8.0M of acquisition-related costs and $3.7M of workforce-reduction cost, and includes a $1.3M real-estate gain. Company non-GAAP operating margin was 40.6%; the 13-point gap is almost entirely SBC. FY2024's 19.1% GAAP margin was depressed by $47.2M of severance and ~$346.5M of SBC, which is why FY2025 is the cleaner base. CROSS-CHECK: H1 2026 GAAP operating income $337.6M / $1,261.0M = 26.8% (H1 2025: 28.2%), with SBC 11.8% of revenue. |
| Forecast revenue growth | -0% → 0% → 0% → 1% → 2% | Assumption — TickerWorth's 5-year explicit forecast |
| Risk-free rate | 5.2% | US 10Y Treasury constant maturity (FRED DGS10): 5.24% on 2026-10-01, the latest published observation; program-wide input shared by every researched model. |
| Beta | 0.87 | Assumption — relevered estimate (published yfinance 5Y-monthly beta 0.631): RELEVERED UP from the published 0.631 to 0.87 - CONSERVATIVE (raises WACC, lowers value). Reason, from the filings: for most of the 60-month regression window Dropbox carried roughly zero net debt (~$1.39B of 0% convertibles against a similar cash pile), so 0.63 is close to an UNLEVERED beta. Since December 2024 it has drawn a $2.7B secured term loan to fund buybacks; at 2026-06-30 it owed $3,654M (term loan $2,674.8M + 2028 converts $693.3M + finance leases $285.9M) against a ~$7,757M market cap, D/E = 0.47. Relevering: 0.631 x (1 + (1 - 20%) x 0.47) = 0.87. A monthly regression has barely seen the new capital structure. At the published 0.631 the model gives ~$30.45 (WACC 7.63%); at 1.0 it gives ~$22.90. THIS IS ONE OF THE TWO CALLS THAT EXPLAIN MOST OF THE GAP TO THE PRICE (see caveats). |
| Terminal growth | 2.0% | Assumption — estimate, departing from the 2.5% house default (evidence: FY2023-FY2026 revenue and ARR in the Q4 2025 and Q2 2026 releases): 2.0%, BELOW THE 2.5% HOUSE DEFAULT, for a stated reason: Dropbox's revenue has been flat for three years ($2,501.6M FY2023 -> $2,518M guided FY2026), constant-currency revenue ex-FormSwift grew 0.1% in Q2 2026, and paying users have hovered around 18.1-18.2M since 2024. A perpetuity at nominal GDP (2.5%) would assume a growth rate this business has not produced since 2023; 2.0% is roughly price increases on a flat seat base. 2.5% adds ~$2.40/share (to ~$27.60). Well below the 8.44% WACC. |
| Diluted shares | 227M | Dropbox Q2 2026 results release, 8-K Ex-99.1 (accession 0001467623-26-000045, filed 2026-08-06): Q2 2026 weighted-average diluted shares 226.8M (Q2 2025: 276.7M; FY2025: 272.8M) - an 18% YoY reduction from buybacks ($697.1M in H1 2026, $1,713.9M in FY2025). Q3 2026 guided at 223-228M and FY2026 at 226-231M. CONSERVATIVE in a known direction: 225.7M were outstanding on 2026-08-03 and that figure includes 8.27M unvested co-founder RSAs tied to stock-price goals; excluding them (217.4M) adds ~$1.10/share. $1.4B of buyback authorization remained at 2026-06-30 after a new $900M program (2026-06-01). The automatic model uses FY2025's 272.8M, ~20% too many shares. |
| Market price | $32.58 | Delayed quote · as of 2026-11-10 05:04 UTC |
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Most undervalued stocks (per our valuation) · Undervalued Technology stocks · All valued stocks · Interactive DBX valuation & downloadable modelTickerWorth is an educational DCF tool, not a licensed investment adviser. Figures are estimates derived from public filings and market data and can be wrong.