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Should You Buy the Dip in Dropbox Stock?

7 Rules for Banking 8%+ Dividends (and 100%+ Gains) in Closed-End Funds

Dropbox, Inc. (NASDAQ:DBX) is an American software company that operates a global collaboration platform. DBX has over 700 million registered users across about 180 countries, providing cloud storage, file synchronization, personal cloud, and client software. The software company has a large market cap, currently valued at $7.4 billion. At last glance, DBX is trading down 1.6% at $20.38.

Dropbox stock has decreased about 30% over the past 12 months and DBX is down 35% since peaking at a 52-week high of $31.47 last November. In addition, the software stock has dropped in price 16% year-to-date and now trades at an intriguing forward price-earnings ratio of 11.86 and a price-sales ratio of 3.37.

Furthermore, Dropbox stock provides some decent fundamentals. DBX maintains a manageable balance sheet with $1.45 billion in cash and $2.32 billion in total debt. Moreover, the software company has grown its annual revenues by 61.7% and has increased its annual net income by $826.8 million since fiscal 2018, generating $2.25 billion in revenue and $342 million in net income over the past 12 months.

Meanwhile, short-term options traders have rarely been more put-biased. This is per Dropbox stock’s Schaeffer’s put/call open interest ratio (SOIR) of 1.52, which stands in the 81st percentile of annual readings.

Options are affordably priced too, per the shares’ Schaeffer’s Volatility Index (SVI) of 39%, which ranks in the low 27th percentile of its annual range. 

Since 2018, one of the most compelling sectors for growth-oriented investors is the sports betting sector. That was the year the U.S. Supreme Court allowed states to legalize sports betting. Since then 30 states have taken that step including New York and New Jersey which are two key markets. In fact, the state of New York broke a record when it legalized online sports betting in January 2022.

This makes it a good time to consider investing in sports betting stocks. Many of these stocks are trading at significant discounts as part of the broad market sell-off. The reason for this is competition. There are a nearly endless number of online sportsbooks competing for consumer dollars.

And it would appear there’s enough revenue to go around. According to Data Bridge Market Research, the global sports betting market is expected to grow at a compound annual growth rate of 10.26% between now and 2029.

With that said, sports betting stocks are definitely risk-on assets. And the payoff may be years away.  But if you have time and have a tolerance for risk, here are seven sports betting stocks to consider for solid upside gains.

View the “7 Sports Betting Stocks to Buy for Their Long-Term Possibilities”.

What do you think?

Written by Steve Ives

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