Dropbox Posts a Strong Quarter Amid Macroeconomic Uncertainty; Maintain Our $26 FVE

We are maintaining our $26 fair value estimate for no-moat Dropbox as the firm closed out its third quarter with results largely in line with our expectations. Despite macroeconomic headwinds, primarily in the shape of a strengthening U.S. dollar, Dropbox continued to see top-line strength. Overall, we are pleased with Dropbox's transition from the commoditized cloud storage segment into the more holistic content collaboration platform segment. With a broader set of offerings and collaboration tools, we remain optimistic about the firm's average revenue per user and user additions. With shares trading flat afterhours, we view Dropbox as moderately undervalued.