[Yrlec]

I'd be very surprised if Dropbox manages to IPO at $10B valuation. The growth simply isn't there. They're big on platforms and markets with no growth but they're getting killed in growth markets. E.g. my cloud storage startup Degoo recently surpassed Dropbox on the Android grossing rank in India (http://imgur.com/HsII1KK) and we're only 5 people.

[uiri]

Their revenue according to the article is $750 million a year. You really think that their P/E ratio is less than 13? Most tech companies trade at a P/E between 25 and 30 these days. I wouldn't be surprised if DropBox's valuation was around $20B.

[umeshunni]

As the other response said, you're confusing revenue with earnings.

Very few companies have a revenue multiple of 13x. Looking at this chart https://blog.intercom.com/wp-content/uploads/2014/07/4-forwa... it looks like Dropbox can expect something in the 6x-10x range, valuing them at $4.5-7.5B.

[uiri]

Seems that you are correct - earnings refers to profit (bottom line) rather than reveneu (top line). Thanks!

That being the case, DropBox probably isn't profitable yet which would throw their P/E through the roof and make that a useless metric.

Box is already public and it has revenue around $300 million and a valuation of ~$1.9B. DropBox will probably get a better revenue multiplier since their customer acquisition cost is lower than and their overall network effects and future outlook is better than Box. I'd place DropBox at a ~$6B valuation. Hopefully their revenue grows enough between now and IPO to support something closer to $10 or $12B.

[jazzyk]

I think you are confusing revenues with earnings...