Back to top

Analyst Blog

It seems there is no end to Shutterfly Inc.’s (SFLY) acquisition spree. This Calif.-based personalized photo services company recently purchased a privately-held company, R&R Images for an undisclosed amount. Phoenix, Ariz.-based R&R Images is engaged in premium stationery printing and product design.

Shutterfly is focused on growing its business through strategic partnerships with retailers and through acquisitions. Some of Shutterfly’s latest acquisitions include MyPublisher, one of the photo book industry pioneers in May 2013; ThisLife, which offers a cloud-based solution for protecting, organizing and sharing photos and videos in Jan 2013; Fuji Film’s photo creating and sharing website SeeHere.com in Oct 2012 and Kodak Gallery online photo services (formerly known as Ofoto) in May 2012.

In the last three years ended 2012, Shutterfly also took control of a mobile application developing company – Penguin Digital (2012); Israel-based photo software company – Photoccino (2012), a leading online social expression and publishing services company – Tiny Prints (2011) as well as TinyPictures (2009) and Nexo (2008).

The latest acquisition indicates that Shutterfly is striving hard to shore up its commercial printing business. In Nov 2010, the company acquired Texas-based WMSG Inc., a privately-held digital direct marketing company. WMSG's digital marketing and print-on-demand solutions helped Shutterfly expand its presence in the commercial print market. Prior to this, in 2009, the company had also entered into a strategic relationship with Group O, a leading provider of marketing services, to provide commercial print services.

The expansion of its commercial print business will also provide an important alternative use for its non-seasonal manufacturing capacity. Notably, the company – which mainly sells photo books, greeting cards, calendars, and ancillary products – derives over 50% of its revenues from the fourth quarter of every year owing to the holiday season. Since Shutterfly’s business is extremely seasonal, management intends to register continued improvement in non-holiday growth rates by leveraging its other side of the business.

Though the acquisition will not have a major impact on Shutterfly’s revenues in the near term, it is expected to boost both its enterprise and consumer segments. Shutterfly has a Zacks Rank #3 (Hold). Internet content companies that warrant a look include Brightcove, Inc. (BCOV - Snapshot Report), TripAdvisor Inc. (TRIP - Snapshot Report) and Points International Ltd (PCOM - Snapshot Report), all with a Zacks Rank #2 (Buy).
 

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
ERBA DIAGNO… ERB 3.80 +7.04%
BANCO DO BR… BDORY 14.74 +5.66%
AIR INDUSTR… AIRI 9.99 +4.15%
EQT MIDSTRE… EQM 98.14 +3.38%
WEATHERFORD… WFT 23.64 +3.10%