It has been about a month since the last earnings report for Shutterfly, Inc. . Shares have lost about 0.3% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Shutterfly Q1 Loss Narrower than Expected, Sales Beat
Shutterfly posted narrower-than-expected loss in the first quarter of 2017. Revenues also beat estimates.
Quarter in Detail
Generally, this personalized products and service provider’s business is highly seasonal and incurs losses in the first three quarters of the year.
Shutterfly posted a loss of $0.84 per share in the first quarter, narrower than the Zacks Consensus Estimate loss of $1.03 and the company’s expected loss in the range of $1.00 to $0.95. The reported figure was also slightly narrower than the prior-year quarter loss of $0.85 per share. The improvement came on the back of a higher top line.
Net revenue increased 6% year over year to $192.0 million and was higher than the guided range of $185.0 million to $190.0 million. In fact, the first-quarter earnings season marked the 65th consecutive quarter of year-over-year net revenue growth. Moreover, revenues surpassed the Zacks Consensus Estimate of $188.9 million by 1.6%.
Revenues of the company benefited from the strong performance of the company’s flagship Shutterfly brand, which was driven by the home décor, personalized gift and photo books categories. This was partially offset by weaker performances at the non-Shutterfly brands including Tiny Prints and Wedding Paper Divas.
Revenues from the Consumers category were up 3% year over year to $160.7 million, backed by high single-digit growth at the Shutterfly flagship brand. Meanwhile, Shutterfly Business Solutions (‘SBS’) segment revenues jumped 19% to $31.3 million.
While the total number of unique customers was up 1% year over year to 3.4 million, total orders generated were essentially flat at 5.5 million. Additionally, average order value was $29.02, up 3% from the year-ago quarter, driven by a favorable product mix.
Gross margin (excluding restructuring charges) decreased 70 basis points (bps) to 39.5%.
Operating expenses totaled $116.6 million (excluding restructuring charges of about $7.7 million), increasing 2% year over year. This was because rise in technology and development costs were partially offset by a decline in general and administrative expenses as well as sales and marketing expenses.
Adjusted EBITDA (Earnings before interest, tax, depreciation and amortization) was at loss of $1.9 million, improving 25% year over year. This reported figure was well above the guidance range of a loss of $7 million to $4.5 million.
2Q17 Earnings Outlook
For the second quarter of 2017, the company expects to incur loss per share in the range of $0.55 to $0.50. The Zacks Consensus Estimate of a loss of $0.50 per share falls towards the higher end of the guided range.
Net revenue is expected to be in the range of $205.0 million to $212.0 million, a year-over-year increase in the band of 0.5% to 3.9%.
Gross profit margin is expected within 43.0% to 43.5% of net revenue. Adjusted EBITDA is expected in the range of $14.0 million to $17.5 million.
2017 Guidance
The company reaffirmed its previously issued guidance for 2017.
The company continues to expect earnings of $0.45 to $0.80 per share in 2017. The Zacks Consensus Estimate of $0.54 per share falls within the guided range.
Net revenue is still expected in the range of $1.135 billion to $1.165 billion, a year-over-year increase of 0.4% to 3.1%. Adjusted EBITDA is anticipated to be in the band of $210.0 to $230.0 million, as expected earlier.
Gross profit margin is projected in the range of 49.0% to 50.0% of net revenue, in line with the previous expectation.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision higher for the current quarter compared to two lower. In the past month, the consensus estimate has shifted downward by 6.6% due to these changes.
Shutterfly, Inc. Price and Consensus
VGM Scores
At this time, the stock has an average Growth Score of 'C', however its Momentum is doing a bit better with a 'B'. However, the stock was allocated a grade of 'B' on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for value and momentum investors than growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.
Image: Bigstock
Shutterfly (SFLY) Down 0.3% Since Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Shutterfly, Inc. . Shares have lost about 0.3% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Shutterfly Q1 Loss Narrower than Expected, Sales Beat
Shutterfly posted narrower-than-expected loss in the first quarter of 2017. Revenues also beat estimates.
Quarter in Detail
Generally, this personalized products and service provider’s business is highly seasonal and incurs losses in the first three quarters of the year.
Shutterfly posted a loss of $0.84 per share in the first quarter, narrower than the Zacks Consensus Estimate loss of $1.03 and the company’s expected loss in the range of $1.00 to $0.95. The reported figure was also slightly narrower than the prior-year quarter loss of $0.85 per share. The improvement came on the back of a higher top line.
Net revenue increased 6% year over year to $192.0 million and was higher than the guided range of $185.0 million to $190.0 million. In fact, the first-quarter earnings season marked the 65th consecutive quarter of year-over-year net revenue growth. Moreover, revenues surpassed the Zacks Consensus Estimate of $188.9 million by 1.6%.
Revenues of the company benefited from the strong performance of the company’s flagship Shutterfly brand, which was driven by the home décor, personalized gift and photo books categories. This was partially offset by weaker performances at the non-Shutterfly brands including Tiny Prints and Wedding Paper Divas.
Revenues from the Consumers category were up 3% year over year to $160.7 million, backed by high single-digit growth at the Shutterfly flagship brand. Meanwhile, Shutterfly Business Solutions (‘SBS’) segment revenues jumped 19% to $31.3 million.
While the total number of unique customers was up 1% year over year to 3.4 million, total orders generated were essentially flat at 5.5 million. Additionally, average order value was $29.02, up 3% from the year-ago quarter, driven by a favorable product mix.
Gross margin (excluding restructuring charges) decreased 70 basis points (bps) to 39.5%.
Operating expenses totaled $116.6 million (excluding restructuring charges of about $7.7 million), increasing 2% year over year. This was because rise in technology and development costs were partially offset by a decline in general and administrative expenses as well as sales and marketing expenses.
Adjusted EBITDA (Earnings before interest, tax, depreciation and amortization) was at loss of $1.9 million, improving 25% year over year. This reported figure was well above the guidance range of a loss of $7 million to $4.5 million.
2Q17 Earnings Outlook
For the second quarter of 2017, the company expects to incur loss per share in the range of $0.55 to $0.50. The Zacks Consensus Estimate of a loss of $0.50 per share falls towards the higher end of the guided range.
Net revenue is expected to be in the range of $205.0 million to $212.0 million, a year-over-year increase in the band of 0.5% to 3.9%.
Gross profit margin is expected within 43.0% to 43.5% of net revenue. Adjusted EBITDA is expected in the range of $14.0 million to $17.5 million.
2017 Guidance
The company reaffirmed its previously issued guidance for 2017.
The company continues to expect earnings of $0.45 to $0.80 per share in 2017. The Zacks Consensus Estimate of $0.54 per share falls within the guided range.
Net revenue is still expected in the range of $1.135 billion to $1.165 billion, a year-over-year increase of 0.4% to 3.1%. Adjusted EBITDA is anticipated to be in the band of $210.0 to $230.0 million, as expected earlier.
Gross profit margin is projected in the range of 49.0% to 50.0% of net revenue, in line with the previous expectation.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision higher for the current quarter compared to two lower. In the past month, the consensus estimate has shifted downward by 6.6% due to these changes.
Shutterfly, Inc. Price and Consensus
Shutterfly, Inc. Price and Consensus | Shutterfly, Inc. Quote
VGM Scores
At this time, the stock has an average Growth Score of 'C', however its Momentum is doing a bit better with a 'B'. However, the stock was allocated a grade of 'B' on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for value and momentum investors than growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.