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Tech Stocks This Week: Drobox Files for IPO, HPE Stock Jumps, and More

By Daniel Sparks - Feb 24, 2018 at 7:06PM

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Dropbox, Hewlett Packard Enterprise, and Amazon.com stole the show this week.

Last week included some interesting stories in tech, but three stood out:

  1. Dropbox, Inc. filed an S-1 prospectus with the Securities and Exchange Commission, highlighting its intent to go public.
  2. Hewlett-Packard Enterprise (HPE -0.90%) crushed expectations for its first quarter, sending its shares more than 10% higher on Friday.
  3. Amazon.com (AMZN -2.65%) finished the week at a new high of $1,500 for the first time, putting the spotlight on the company's huge growth in revenue and earnings.
A diagram showing laptops connected to a cloud

Image source: Getty Images.

Dropbox is going public

In what is expected to be the largest tech IPO since Snap went public just over a year ago, Dropbox filed an S-1 prospectus, highlighting the company's plans to go public and providing insight into the company's financials.

The S-1 prospectus showed a fast-growing company that's still losing money. But Dropbox's losses are narrowing quickly.

Metric

2017

2016

2015

Revenue

$1.1 billion

$845 million

$604 million

Net loss

($0.38)

($0.74)

($1.18)

Data source: Dropbox's S-1 filing.

Between 2015 and 2017, annual revenue has risen from $604 million to $1.1 billion, while net losses per share have narrowed from $1.18 to $0.38.

Other notable facts from the S-1 filing:

  • Dropbox has 500 million registered users, but only 11 million are paying.
  • Dropbox has expanded to more than 180 countries.
  • Users have uploaded over 400 billion pieces of content to Dropbox.

Dropbox plans to trade under the ticker DBX and could begin trading as early as next month. The company is expected to target a valuation of about $7 billion to $8 billion, according to The Wall Street Journal.

HPE stock soars

Sometimes companies beat expectations, but every now and they absolutely crush them. That's what HPE did this week. The company reported first-quarter revenue of $7.7 billion, up 11% and far ahead of a consensus analyst estimate for quarterly revenue of $7.1 billion. The company's earnings per share and guidance also handily beat estimates.

"[T]his was an execution-focused quarter, we executed better, we accelerated our sales transformation, including our pricing, and sales-enablement decision-making," recently appointed HPE CEO Antonio Neri said about the results in an interview with Barron's.

Amazon.com stock hits $1,500

Amazon stock's torrential rise persisted this week, closing at $1,500 exactly on Friday. That puts shares up about 76% in the past 12 months, from just under $850.

Bullishness toward Amazon stock recently has been driven by the company's strong third and fourth quarters. In Amazon's fourth quarter, net sales rose 38% year over year and earnings per share skyrocketed 143%. But what was arguably even more impressive was Amazon's guidance for first-quarter revenue to rise between 34% and 42%.

Along with Amazon's higher stock price, of course, is a pricier valuation. Amazon's price-to-sales ratio is now about 4.2, up from around 3 at the beginning of 2017.

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Stocks Mentioned

Amazon.com, Inc. Stock Quote
Amazon.com, Inc.
AMZN
$106.03 (-2.65%) $-2.89
Hewlett Packard Enterprise Company Stock Quote
Hewlett Packard Enterprise Company
HPE
$13.24 (-0.90%) $0.12
Snap Inc. Stock Quote
Snap Inc.
SNAP
$13.10 (-6.20%) $0.86

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