DBX Sees New Coverage Amid Rebound Attempt

The stock recently dipped after workforce reduction headlines

Assistant Editor
Jan 15, 2021 at 9:23 AM
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The shares of DropBox Inc (NASDAQ:DBX) are up a modest 0.2% at $22.72 before the bell, after KeyBanc initiated coverage with a "sector weight" rating. After consolidating below the 40-day moving average for most of November, the stock broke out at the end of the month to culminate in a Dec. 23 annual high of $25.16. Taking a breather since then, DBX's recent bounce off the $21 region was cut short after company cut around 11% of its global workforce. Longer term, the equity remains up roughly 24% year-over-year. 

Coming into today, a majority of analysts were bullish on Dropbox stock. Of the six in coverage, five carry a "strong buy" rating. Plus, the 12-month consensus price target of $28.33 is a 24.9% premium to last night's close. 

The options pits are of similar sentiment, as per the security's 50-day call/put volume ratio of 5.52 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio stands higher than 77% of readings from the past year, indicating long calls are being picked up at a faster-than-usual clip. 

Meanwhile, shorts are jumping ship, with short interest down 25.5% in the last reporting period. The 17.04 million shares sold short still account for 7.5% of the stock's available float, though, and would take nearly three days to cover at DBX's average pace of trading. 

 

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