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Skydrive, GDrive, and iCloud will intensify their competition in the coming years as cloud vs. The founders are still running the company even after this scorching growth and that is a big positive.ĭropbox is in an industry where the tech triumverate - Microsoft, Google, and Apple are committed in. They have attracted a lot of smart engineers, and no major controversy has come out.
Businesses seem an even more lucrative segment, and Dropbox has its foot there.ĭropbox has a great team, and the founders seem to go together well. Given that 96% are yet to pay, but still finding use, you could have a large upside when many of those who hit the ceiling at 2 GB are forced to move to the paid version. I'm sure we will see more of these in the months to come. Facebook groups has now announced a Dropbox integration in it.
The network effects could hit a tipping point soon.
There are network effects at play here, given that a lot of people use Dropbox to share files among their friends. Cloud computing industry is red hot and the segment that Dropbox is in has 50%+ annual growth rates. This means they are efficient and better at scaling. They also have less than 150 employees (only a third are engineers) and that gives the revenue/employee at above $2 million.
Not too bad, given that average PE for publicly traded companies is about 22 and for many pre-IPO companies the ratio is in the triple digits. Financial Health: Let us assume their net margins are 33% and that could give a net profit of $133 million and a 4 Billion valuation means a 30 P/E (defined as: total value of the company/net profits).