Dropbox Inc., the file hosting company, which currently has a market capitalization of approximately 12.7 bln. USD is actually with an intrinsic value of 22 billion USD, in my opinion.
The current valuation metric of 5 times Price/Sales ratio is simply too low for Dropbox. Dropbox is growing at 13.52 % year on year for the last quarter, posting 16.58 % net profit margin for the second quarter of 2021. Such metrics simply presuppose a higher than the current market capitalization for Dropbox.
File hosting is basically a cloud computing service. And cloud computing along with artificial intelligence are driving the current fourth industrial revolution. AI, artificial intelligence, is actually a computing cloud service. Yes, file hosting services are being commoditized, getting cheaper and more accessible as many huge companies like Microsoft, Alphabet(owner of Google) are offering file hosting.
Dropbox, however, has a significant first mover advantage and a strong grip on the consumer hosting services or cloud computing infrastructure.
No comments:
Post a Comment