Founded in 1999 and headquartered in Redwood City, CA, Shutterfly is a leading provider of Internet-based social expression and personal publishing service. They had IPO’d in 2006.
The company has a portfolio of premium lifestyle brands including Shutterfly, Tiny Prints, Wedding Paper Divas, BorrowLenses, MyPubisher, and Groovebook.
Consumer revenues accounted for 93% of total revenue in 2016, while Business Solutions contributed 7%.
The company reported weak Q4 2016 results, missing on both the top and bottom lines. Adjusted earnings of $2.63 per share were short of the Zacks Consensus Estimate of $2.73. Earnings were also down 26.3% year-over-year.
While net revenue increased 2% year-over-year, they missed the Zacks Consensus Estimate of $586.4 million.
Management’s outlook for the current quarter was also weaker than street expectations. Shares plunged after the report.
“In recent years, we spread our resources thin across many businesses, brands and platforms, making it impossible to dedicate the right level of resource to each one,” said the CEO.
They also announced reduction of their head count by 13% and closing of three offices.
Analysts have slashed their estimates for the company after disappointing results. Zacks Consensus Estimates for the current and the next fiscal year have plunged to $0.56 per share and $1.43 per share respectively, from $1.20 and $1.98, 7 days ago. Declining estimates sent the stock to a Zacks Rank #5 (Strong Sell).
The following chart shows negative price and earnings momentum:
Considering the sharp plunge in analysts’ earnings estimates, it appears that more pain lies ahead for the company. Investors looking for a better stock in the industry could consider RELX PLC (RELX), which currently has a Zacks Rank #2 (Buy).
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