Intrinsic value of Dropbox, Inc. - DBX

Previous Close

$23.52

  Intrinsic Value

$0.62

stock screener

  Rating & Target

str. sell

-97%

Previous close

$23.52

 
Intrinsic value

$0.62

 
Up/down potential

-97%

 
Rating

str. sell

We calculate the intrinsic value of DBX stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 9.7

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  23.00
  21.20
  19.58
  18.12
  16.81
  15.63
  14.57
  13.61
  12.75
  11.97
  11.28
  10.65
  10.08
  9.58
  9.12
  8.71
  8.34
  8.00
  7.70
  7.43
  7.19
  6.97
  6.77
  6.60
  6.44
  6.29
  6.16
  6.05
  5.94
  5.85
Revenue, $m
  1,712
  2,075
  2,481
  2,931
  3,424
  3,959
  4,536
  5,153
  5,810
  6,505
  7,239
  8,010
  8,818
  9,662
  10,543
  11,461
  12,416
  13,410
  14,442
  15,516
  16,631
  17,790
  18,995
  20,248
  21,551
  22,907
  24,318
  25,789
  27,321
  28,919
Variable operating expenses, $m
  1,881
  2,274
  2,713
  3,199
  3,731
  4,309
  4,933
  5,600
  6,310
  7,061
  7,823
  8,656
  9,529
  10,441
  11,393
  12,385
  13,417
  14,491
  15,607
  16,767
  17,972
  19,225
  20,527
  21,881
  23,289
  24,754
  26,280
  27,869
  29,525
  31,251
Fixed operating expenses, $m
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
Total operating expenses, $m
  1,880
  2,273
  2,712
  3,198
  3,730
  4,308
  4,932
  5,599
  6,309
  7,060
  7,822
  8,655
  9,528
  10,440
  11,392
  12,384
  13,416
  14,490
  15,605
  16,765
  17,970
  19,223
  20,525
  21,879
  23,287
  24,752
  26,278
  27,867
  29,523
  31,249
Operating income, $m
  -168
  -197
  -230
  -266
  -306
  -349
  -396
  -446
  -498
  -555
  -583
  -645
  -710
  -778
  -849
  -923
  -1,000
  -1,080
  -1,163
  -1,250
  -1,340
  -1,433
  -1,530
  -1,631
  -1,737
  -1,846
  -1,960
  -2,078
  -2,202
  -2,331
EBITDA, $m
  -43
  -52
  -63
  -74
  -87
  -100
  -115
  -131
  -148
  -166
  -184
  -204
  -225
  -247
  -269
  -293
  -317
  -343
  -369
  -397
  -425
  -455
  -486
  -518
  -551
  -586
  -622
  -660
  -699
  -740
Interest expense (income), $m
  0
  9
  21
  34
  49
  65
  83
  103
  124
  146
  170
  196
  223
  251
  280
  311
  344
  377
  412
  448
  486
  526
  566
  609
  653
  699
  746
  796
  848
  901
  957
Earnings before tax, $m
  -177
  -218
  -264
  -315
  -371
  -432
  -498
  -569
  -645
  -725
  -779
  -867
  -961
  -1,058
  -1,160
  -1,267
  -1,377
  -1,492
  -1,612
  -1,736
  -1,865
  -2,000
  -2,139
  -2,284
  -2,435
  -2,592
  -2,756
  -2,926
  -3,103
  -3,288
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -177
  -218
  -264
  -315
  -371
  -432
  -498
  -569
  -645
  -725
  -779
  -867
  -961
  -1,058
  -1,160
  -1,267
  -1,377
  -1,492
  -1,612
  -1,736
  -1,865
  -2,000
  -2,139
  -2,284
  -2,435
  -2,592
  -2,756
  -2,926
  -3,103
  -3,288

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  1,684
  2,040
  2,440
  2,882
  3,367
  3,893
  4,460
  5,067
  5,713
  6,397
  7,118
  7,876
  8,670
  9,500
  10,367
  11,269
  12,208
  13,185
  14,201
  15,256
  16,353
  17,493
  18,677
  19,909
  21,190
  22,524
  23,912
  25,358
  26,865
  28,436
Adjusted assets (=assets-cash), $m
  1,684
  2,040
  2,440
  2,882
  3,367
  3,893
  4,460
  5,067
  5,713
  6,397
  7,118
  7,876
  8,670
  9,500
  10,367
  11,269
  12,208
  13,185
  14,201
  15,256
  16,353
  17,493
  18,677
  19,909
  21,190
  22,524
  23,912
  25,358
  26,865
  28,436
Revenue / Adjusted assets
  1.017
  1.017
  1.017
  1.017
  1.017
  1.017
  1.017
  1.017
  1.017
  1.017
  1.017
  1.017
  1.017
  1.017
  1.017
  1.017
  1.017
  1.017
  1.017
  1.017
  1.017
  1.017
  1.017
  1.017
  1.017
  1.017
  1.017
  1.017
  1.017
  1.017
Average production assets, $m
  471
  571
  682
  806
  942
  1,089
  1,247
  1,417
  1,598
  1,789
  1,991
  2,203
  2,425
  2,657
  2,899
  3,152
  3,414
  3,688
  3,972
  4,267
  4,573
  4,892
  5,224
  5,568
  5,926
  6,299
  6,688
  7,092
  7,513
  7,953
Working capital, $m
  -791
  -959
  -1,146
  -1,354
  -1,582
  -1,829
  -2,095
  -2,381
  -2,684
  -3,006
  -3,344
  -3,701
  -4,074
  -4,464
  -4,871
  -5,295
  -5,736
  -6,195
  -6,672
  -7,168
  -7,683
  -8,219
  -8,776
  -9,354
  -9,956
  -10,583
  -11,235
  -11,914
  -12,622
  -13,361
Total debt, $m
  380
  626
  901
  1,206
  1,540
  1,902
  2,293
  2,711
  3,156
  3,628
  4,125
  4,647
  5,194
  5,766
  6,363
  6,985
  7,632
  8,305
  9,005
  9,732
  10,487
  11,273
  12,089
  12,938
  13,820
  14,739
  15,696
  16,692
  17,730
  18,812
Total liabilities, $m
  1,160
  1,406
  1,681
  1,986
  2,320
  2,682
  3,073
  3,491
  3,936
  4,407
  4,904
  5,427
  5,974
  6,546
  7,143
  7,764
  8,412
  9,085
  9,784
  10,512
  11,267
  12,052
  12,869
  13,717
  14,600
  15,519
  16,475
  17,472
  18,510
  19,592
Total equity, $m
  524
  635
  759
  896
  1,047
  1,211
  1,387
  1,576
  1,777
  1,989
  2,214
  2,449
  2,696
  2,955
  3,224
  3,505
  3,797
  4,101
  4,416
  4,745
  5,086
  5,440
  5,809
  6,192
  6,590
  7,005
  7,437
  7,886
  8,355
  8,843
Total liabilities and equity, $m
  1,684
  2,041
  2,440
  2,882
  3,367
  3,893
  4,460
  5,067
  5,713
  6,396
  7,118
  7,876
  8,670
  9,501
  10,367
  11,269
  12,209
  13,186
  14,200
  15,257
  16,353
  17,492
  18,678
  19,909
  21,190
  22,524
  23,912
  25,358
  26,865
  28,435
Debt-to-equity ratio
  0.730
  0.990
  1.190
  1.350
  1.470
  1.570
  1.650
  1.720
  1.780
  1.820
  1.860
  1.900
  1.930
  1.950
  1.970
  1.990
  2.010
  2.030
  2.040
  2.050
  2.060
  2.070
  2.080
  2.090
  2.100
  2.100
  2.110
  2.120
  2.120
  2.130
Adjusted equity ratio
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311
  0.311

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -177
  -218
  -264
  -315
  -371
  -432
  -498
  -569
  -645
  -725
  -779
  -867
  -961
  -1,058
  -1,160
  -1,267
  -1,377
  -1,492
  -1,612
  -1,736
  -1,865
  -2,000
  -2,139
  -2,284
  -2,435
  -2,592
  -2,756
  -2,926
  -3,103
  -3,288
Depreciation, amort., depletion, $m
  125
  145
  168
  192
  219
  249
  281
  315
  351
  389
  398
  441
  485
  531
  580
  630
  683
  738
  794
  853
  915
  978
  1,045
  1,114
  1,185
  1,260
  1,338
  1,418
  1,503
  1,591
Funds from operations, $m
  -52
  -73
  -96
  -123
  -152
  -184
  -218
  -255
  -294
  -336
  -380
  -427
  -476
  -527
  -580
  -636
  -694
  -755
  -818
  -883
  -951
  -1,021
  -1,094
  -1,171
  -1,250
  -1,332
  -1,418
  -1,507
  -1,600
  -1,697
Change in working capital, $m
  -148
  -168
  -188
  -208
  -228
  -247
  -266
  -285
  -303
  -321
  -339
  -356
  -373
  -390
  -407
  -424
  -441
  -459
  -477
  -496
  -515
  -536
  -557
  -579
  -602
  -626
  -652
  -679
  -708
  -738
Cash from operations, $m
  96
  95
  91
  85
  76
  64
  48
  30
  9
  -15
  -41
  -71
  -103
  -137
  -173
  -212
  -253
  -296
  -340
  -387
  -435
  -486
  -538
  -592
  -648
  -706
  -766
  -828
  -893
  -959
Maintenance CAPEX, $m
  -77
  -94
  -114
  -136
  -161
  -188
  -218
  -249
  -283
  -320
  -358
  -398
  -441
  -485
  -531
  -580
  -630
  -683
  -738
  -794
  -853
  -915
  -978
  -1,045
  -1,114
  -1,185
  -1,260
  -1,338
  -1,418
  -1,503
New CAPEX, $m
  -88
  -100
  -112
  -124
  -135
  -147
  -159
  -170
  -181
  -191
  -202
  -212
  -222
  -232
  -242
  -252
  -263
  -273
  -284
  -295
  -307
  -319
  -331
  -345
  -358
  -373
  -388
  -404
  -421
  -439
Cash from investing activities, $m
  -165
  -194
  -226
  -260
  -296
  -335
  -377
  -419
  -464
  -511
  -560
  -610
  -663
  -717
  -773
  -832
  -893
  -956
  -1,022
  -1,089
  -1,160
  -1,234
  -1,309
  -1,390
  -1,472
  -1,558
  -1,648
  -1,742
  -1,839
  -1,942
Free cash flow, $m
  -68
  -99
  -135
  -175
  -221
  -272
  -328
  -389
  -455
  -526
  -601
  -681
  -765
  -854
  -947
  -1,044
  -1,146
  -1,252
  -1,362
  -1,476
  -1,595
  -1,719
  -1,848
  -1,981
  -2,120
  -2,264
  -2,414
  -2,570
  -2,732
  -2,901
Issuance/(repayment) of debt, $m
  216
  246
  275
  305
  334
  363
  391
  418
  445
  471
  497
  522
  547
  572
  597
  622
  647
  673
  700
  727
  756
  785
  816
  849
  883
  919
  956
  996
  1,038
  1,082
Issuance/(repurchase) of shares, $m
  276
  329
  388
  453
  522
  596
  675
  758
  846
  938
  1,003
  1,103
  1,208
  1,317
  1,430
  1,547
  1,669
  1,796
  1,928
  2,064
  2,206
  2,354
  2,508
  2,667
  2,834
  3,007
  3,187
  3,375
  3,572
  3,777
Cash from financing (excl. dividends), $m  
  492
  575
  663
  758
  856
  959
  1,066
  1,176
  1,291
  1,409
  1,500
  1,625
  1,755
  1,889
  2,027
  2,169
  2,316
  2,469
  2,628
  2,791
  2,962
  3,139
  3,324
  3,516
  3,717
  3,926
  4,143
  4,371
  4,610
  4,859
Total cash flow (excl. dividends), $m
  424
  476
  529
  582
  635
  687
  738
  787
  836
  883
  899
  945
  990
  1,035
  1,079
  1,125
  1,171
  1,217
  1,265
  1,315
  1,367
  1,420
  1,476
  1,535
  1,597
  1,662
  1,730
  1,802
  1,878
  1,958
Retained Cash Flow (-), $m
  -276
  -329
  -388
  -453
  -522
  -596
  -675
  -758
  -846
  -938
  -1,003
  -1,103
  -1,208
  -1,317
  -1,430
  -1,547
  -1,669
  -1,796
  -1,928
  -2,064
  -2,206
  -2,354
  -2,508
  -2,667
  -2,834
  -3,007
  -3,187
  -3,375
  -3,572
  -3,777
Prev. year cash balance distribution, $m
  252
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  400
  147
  141
  129
  113
  91
  63
  29
  -10
  -54
  -104
  -159
  -218
  -282
  -350
  -423
  -499
  -579
  -662
  -749
  -840
  -934
  -1,031
  -1,132
  -1,237
  -1,345
  -1,458
  -1,574
  -1,694
  -1,819
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  384
  134
  122
  107
  87
  66
  42
  18
  -6
  -28
  -49
  -68
  -83
  -95
  -103
  -107
  -109
  -107
  -102
  -95
  -87
  -77
  -68
  -58
  -48
  -39
  -31
  -24
  -18
  -14
Current shareholders' claim on cash, %
  93.9
  88.4
  83.3
  78.6
  74.3
  70.3
  66.5
  63.1
  59.9
  56.9
  54.2
  51.6
  49.2
  46.9
  44.7
  42.7
  40.7
  38.9
  37.1
  35.5
  33.9
  32.4
  31.0
  29.6
  28.3
  27.1
  25.9
  24.8
  23.7
  22.7

FINANCIAL RATIOS  of  Dropbox, Inc. (DBX)

Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

DBX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the DBX stock intrinsic value calculation we used $1392 million for the last fiscal year's total revenue generated by Dropbox, Inc.. The default revenue input number comes from 0001 income statement of Dropbox, Inc.. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our DBX stock valuation model: a) initial revenue growth rate of 23% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for DBX is calculated based on our internal credit rating of Dropbox, Inc., is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Dropbox, Inc..
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of DBX stock the variable cost ratio is equal to 110.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $-1 million in the base year in the intrinsic value calculation for DBX stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Dropbox, Inc..

Corporate tax rate of 27% is the nominal tax rate for Dropbox, Inc.. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the DBX stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for DBX are equal to 27.5%.

Life of production assets of 2.6 years is the average useful life of capital assets used in Dropbox, Inc. operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for DBX is equal to -46.2%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $676.8 million for Dropbox, Inc. - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 411.475 million for Dropbox, Inc. is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Dropbox, Inc. at the current share price and the inputted number of shares is $9.7 billion.

CONTACT US      

About X-FIN       Privacy policy       Terms of use      

Copyright © X-FIN.com 2005-2019. All rigths reserved.