Axiom Sees 'Good Quarter' For Shutterfly

In a report issued Monday, Axiom’s Managing Director of Internet Media Victor Anthony reiterated a Buy rating and $54.00 price target on shares of Shutterfly, Inc. SFLY.

With the proxy fight over, shareholders could once again focus on the company’s operating results. Axiom’s checks suggest that results should be robust, even in spite of the distraction created by the proxy conflict. The only caveat should be the level of expenses related to the proxy.

“Key would be how Shutterfly’s playbook [regarding capital allocation] changes with the presence of two activist board members. As for the fundamentals, we see them staying largely intact from here,” the analysts add.

Into The Second Quarter

Axiom believes estimates for Shutterfly’s second quarter look achievable. The firm is modeling revenues of $180 million, up 13.1 percent year-over-year, and an adjusted net loss of $(0.94) per share, well above the Street’s consensus of $(1.06) per share (Estimize) and guidance of ($1.09) per share. The analysts also project adjusted EBITDA of $6.1 million and a 3.4 percent margin.

The revenue estimates above are based on “conservative consumer revenue growth” of 11 percent year-over-year (versus 13.9 percent registered in the first quarter) and Enterprise growth of 50 percent year-over-year.

In general, tracking data points towards a healthy environment for the company in the second quarter. The analysts believe this bodes well for an increase in revenue.

For the full year, Axiom models earnings of $0.06 per share. For 2016, the estimate ascends to $0.83 per share.