If you’re trying to build your earnings season watch list by looking for stocks setting up in a base ahead of their next earnings report, here’s one that fits the bill: Dropbox (DBX). It’s expected to release its latest numbers around Nov. 4 and is currently about 6% shy of a 33.10 buy point. The entry is based on a first-stage consolidation.
Keep in mind that jumping into a stock right as it gets ready to report means you likely won’t have enough time to build a profit cushion before the release. That leaves you exposed to a sudden downturn if the company misses analyst estimates or provides weak guidance. You can minimize your risk by waiting to see the actual numbers and the market’s reaction. Another way to minimize the risk of a post-earnings sell-off is to use an options strategy.
While Dropbox stock’s bottom line growth fell in the company’s most recently reported quarter from 106% to 82%, sales rose 14%, up from 12% in the prior report.
Consensus analyst estimates call for EPS growth of 34% for the quarter, and 56% growth for the full year. Earnings estimates for the full year were recently revised higher.
Dropbox stock has a 98 Composite Rating and holds the No. 1 rank among its peers in the Computer Software-Database industry group. Progress Software (PRGS) and Workiva (WK) are also among the group’s highest-rated stocks.
Note: Dates for earnings reports are subject to change. Check the company’s website for any updates.
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