Shares of the cloud-data storage company briefly rallied as much as 9.7%, the biggest intraday gain since early August, as quarterly revenue topped estimates, and losses narrowed by more than half compared to the same period a year ago.

Dropbox co-founder chief executive Drew Houston noted the company’s progress in the quarter, highlighting new product experiences and features like Nautilus and Paper timelines and integrations with companies including Zoom and Salesforce. “We have a huge opportunity to improve the experience of using technology at work,” he said in a conference call.

Here’s what Wall Street thinks:
Deutsche Bank, Karl Keirstead

Scheduled to host an investor meeting with Dropbox in NYC on Monday.

‘‘Following a weaker-than-expected 2Q18 print when subscriber growth metrics fell short, investor expectations into the 3Q18 print were somewhat muted’’

‘‘Dropbox posted numbers that in our view will be a positive surprise, highlighted by an acceleration in ARPU growth to 6%, revs growth of 26% to US$360m and a big non-GAAP OM beat (13% compared to guidance of 8%)’’

‘‘The 4Q18 guide was roughly in-line with our estimates and the guidance for a revs growth deceleration to 21% in 4Q18 looks conservative’’

Reaffirms buy, cuts price target to US$32 from US$36.

JPMorgan

Dropbox’s results were ‘‘strong – nice upside on EPS, revs, billings, and cash flow’’
Piper Jaffray, Alex Zukin.

‘‘Dropbox posted another solid quarter of financial performance punctuated by accelerating ARPU growth and solid new user adds, with the bulk of ARPU being driven by new user growth’’

‘‘While new user growth was also strong (400k adds, +18% y/y), the company continues to outperform its expectations around driving organic conversions of high-quality new subscribers to premium plans on a consistent basis’’

‘‘Dropbox continued to roll out more advanced features and partnerships, including around security (Google Cloud Identity Proofpoint, and SailPoint), Nautilus (its search engine that leverages optical character recognition), and other vendors’’

‘‘Management continues to hire aggressively on the R&D side, which we believe will continue to fuel product and feature enhancements and sustained ARPU growth over time’’

Maintains overweight and a US$40 price target.

Jefferies, John DiFucci

Management noted tailwinds provided by grandfathered customers up for renewal and highlighted strength in new user adoption of both Professional and Advanced, ‘‘which provided the majority of the US$7 annual increase in ARPU’’

‘‘DBX easily exceeded expectations and raised implied fourth quarter on the back of strong new customer signings and increased ARPU, which primarily benefited from new customers choosing higher priced SKUs and existing customers choosing to keep higher priced functionality as they renewed annual contracts’’

‘‘We continue to believe DBX will increase the value it adds to customers (and investors) over time, and offers compelling value at 6.1x EV/NTM Recurring Rev’’

‘‘Incremental commentary around new user adoption of these premium plans is encouraging both near-term to the numbers and longer-term to the attractive value proposition the company’s additional features provide users’’

Rates buy with a US$37 price target.