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Dropbox is public and has actual profits. I think your comment is not accurate. Instead I think the company has plateaued in growth and thus they need to cut b

Dropbox is public and has actual profits. I think your comment is not accurate. Instead I think the company has plateaued in growth and thus they need to cut back spending otherwise they will have falling profits and no growth - which is worse than just no growth.

toomuchtodo 2y ago
Are their targets reasonable? Or are they reaching for fundamentals that don't exist as a storage utility? (Dropbox customer, pls just sync and store my data reliably) Edit: Reply was as I expected, thanks bhouston, agree they are potentially at the mature stage
- bhouston 2y ago
  If you don’t have growth you have to treat this as a PE firm would. You cut spending to a minimum while ensuring you keep your customers, thus maximizing profit to assets ratio. A lot of companies do not have growth but are great money machines. It may be that this is the mature stage for Dropbox.
osigurdson 2y ago
Yeah, I just had a look at dropbox stock. I would have expected permanent cash hemorrhaging, but no they have a P/E of 15.
- avgDev 2y ago
  That is actually quite good. I am surprised.
  - voisin 2y ago
    A P/E on its own is not good or bad. If the company’s earnings are in decline you would expect a low P/E, and if they were growing aggressively then you would expect a high P/E. It is only when there is a mismatch when the ratio becomes interesting. I am not saying it isn’t interesting in this case but the comment you are replying to does not tell any information that would lead to the conclusion it is “quite good.”
    - bhouston 2y ago
      Yeah if there is no growth but a lot of earnings the stock should probably start to pay dividends no? Otherwise what is it doing with all that cash it is generating?
      - voisin 2y ago
        100%. Doesn’t even have to be zero growth - just growth less than investors want to see, as implied in the P/E ratio (since investors control the P).

toomuchtodo 2y ago

Are their targets reasonable? Or are they reaching for fundamentals that don't exist as a storage utility? (Dropbox customer, pls just sync and store my data reliably) Edit: Reply was as I expected, thanks bhouston, agree they are potentially at the mature stage

bhouston 2y ago
If you don’t have growth you have to treat this as a PE firm would. You cut spending to a minimum while ensuring you keep your customers, thus maximizing profit to assets ratio. A lot of companies do not have growth but are great money machines. It may be that this is the mature stage for Dropbox.

osigurdson 2y ago

Yeah, I just had a look at dropbox stock. I would have expected permanent cash hemorrhaging, but no they have a P/E of 15.

avgDev 2y ago
That is actually quite good. I am surprised.
- voisin 2y ago
  A P/E on its own is not good or bad. If the company’s earnings are in decline you would expect a low P/E, and if they were growing aggressively then you would expect a high P/E. It is only when there is a mismatch when the ratio becomes interesting. I am not saying it isn’t interesting in this case but the comment you are replying to does not tell any information that would lead to the conclusion it is “quite good.”
  - bhouston 2y ago
    Yeah if there is no growth but a lot of earnings the stock should probably start to pay dividends no? Otherwise what is it doing with all that cash it is generating?
    - voisin 2y ago
      100%. Doesn’t even have to be zero growth - just growth less than investors want to see, as implied in the P/E ratio (since investors control the P).