Dropbox Ticks the Box for a Strong Quarter; FVE Up to $30; Shares Fairly Valued

No-moat Dropbox finished off a solid third quarter with top and bottom lines exceeding our above-consensus estimates. Management also revised its year-end guidance upward, with the firm expecting continued revenue growth and improvements in its margin profile. Overall, we are pleased with Dropbox's transition from the commoditized cloud storage space into greener pastures in the more holistic content collaboration platform space. With a broader set of offerings and collaboration tools, we remain optimistic about the firm's average revenue per user and user additions. After modeling in near-term top-line strength, we are raising our fair value estimate to $30 per share from $26 per share. With shares currently trading around $31 per share, we see the stock as fairly valued.