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Ignore the Drop: Analysts Say Dropbox’s Stock Decline Is Short-Lived



Analysts say the fall in share price is temporary after Dropbox, Inc. (DBX) has plummeted by more than 7% in Friday's early-morning bargaining on concerns about the outgoing COO.

"It's like putting a beach ball under water," says Cannabord Genuity analyst Richard Davis. "Will appear".

He added that the decline is probably driven by people less familiar with the company, who are "frightened" by revelation.

"The (fact) that the departure of the COO is a material problem is frankly overwhelming," he said. "This is the problem with the new IPOs: they are fresh and people are new to history.I understand, buyers may be afraid, but in the long-term vision we think we can make money with this title." [1

9659002] Davis said he kept his rating & # 39; buy & # 39; on the stock and set a price target of $ 38.

By giving advice to Dropbox shareholders, Davis mapped a parallel to cloud computing pioneer Salesforce.com, Inc. (CRM). [19659002] "I'm not saying that Dropbox is Salesforce, but Salesforce has lost 50% more times in its first five years and has now increased 30-fold.You had to have a steel stomach."

Thursday, Dropbox released a strong quarter and beating analysts' estimates on earnings per share and revenue.

CEO Drew Houston emphasized the "critical part" of the COO Dennis Woodside played in company during a presentation of the earnings of 9 August, noting the integral part of Dropbox's growth away.

"It's hard to exaggerate Dennis's impact on Dropbox," he said. "When it started, we had a turnover of $ 200 million and our company was a fraction of the size, and during its time here, we've become a publicly traded company with over $ 1 billion in annual revenue and a dozen offices around it. al

Analysts have taken note of the problem, with the analyst of JP Morgan admitting "the loss of COO Dennis Woodside is a bit disappointing" in a note of August 10th.

Murphy maintained an overweight and a price target of $ 35, expressing his optimism for the title despite the discontent for the change of leadership.


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