RBC Capital on Dropbox (DBX): 'we view valuation as attractive'

RBC Capital analyst Rishi Jaluria reiterated an Outperform rating and $32.00 price target on Dropbox (NASDAQ: DBX).

The analyst comments "On Monday (06/01), Dropbox announced that it has entered into a senior secured revolving credit facility providing the company with $400M in borrowing capacity to be used for working capital and general corporate purposes, including share repurchases. In concert with this announcement, management also announced a new repurchase authorization allowing for the repurchase of an additional $900M of class A common stock. We note that as of the F1Q26 earnings (quarter ended March 2026), Dropbox had ~$800M remaining under its existing repurchase program, bringing the combined remaining authorization to $1.7B including today's addition. Shares are up ~6% in intraday trading (vs. IGV up ~4.8%). Stepping back, we think investors continue to have questions around management's willingness to continue adding leverage to the balance sheet in order to repurchase shares, and how sustainable this is. Recall, during Q4 earnings management noted that it plans to exhaust the remaining $1.17B authorization in 2026, helping to drive continued FCF/share growth, and management reiterated this during F1Q26 earnings. Net/net, we view valuation as attractive, and: 1) we're pleased to see management continue to focus on driving Free Cash Flow per share growth as its "North Star" (see our FCF/share primer here ); and 2) we're encouraged by early signs of coinciding stabilization in the core business in Q1."

For an analyst ratings summary and ratings history on Dropbox click here. For more ratings news on Dropbox click here.

Shares of Dropbox closed at $26.88 yesterday.

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