Cantor Fitzgerald Checks Point To 'Stable' Shutterstock Traffic, Firm Still Likes Stock

• Shutterstock Inc SSTK shares are down 57 percent year-to-date, and are trading significantly below their 52-week high of $84.06.
• Cantor Fitzgerald’s Youssef Squali maintained a Buy rating on the company, with a price target of $72.
• Intra-quarter checks have indicated healthy traffic in July and August, without any meaningful change in product pricing, Squali said, while adding that the pushback in shares make them compelling.

The intra-quarter checks reveal that worldwide visitations to Shutterstock's sites remained healthy in July/August. Global unique visitors [UVs] rose 25 percent y/y, versus 22 percent in 2Q15. US UVs were up 11 percent y/y, as compared to 6 percent y/y in 2Q15.

“We're somewhat surprised by a drop-off in traffic to Fotolia (-21% in Jul/Aug) vs. +2% Y/Y in 2Q, but note that this could be the result of customers' migration to Adobe's Creative Cloud offering and/or reduced focus on brand promotion for Fotolia,” Youssef Squali said.

Images in Shutterstock’s collection rose from 57.2 million at the end of June to 63.2 million in late-September. This is a positive for image selection, customer experience, and conversions, Squali mentioned, while adding, “The robust pace of growth in Shutterstock's images also suggests that contributors' engagement with the platform remains high.”

Adobe Systems Incorporated ADBE has been offering a 50 percent discount on single images in September, bring the per-image pricing down from $9.99 to $4.99. While Adobe has tried to encourage customers to tryout its new stock imagery service, this action has “not seen a competitive response from Shutterstock,” Squali stated.

In the report Cantor Fitzgerald noted that Adobe’s pricing does not appear to be disruptive so far. Moreover, Shutterstock can reduce its pricing to match Adobe's offering, but “seems to not see the need at this point.”

“While we have no way of measuring Adobe stock offering's success within the Creative Cloud, we see no major variability in Shutterstock's traffic and/or business QTD. With the stock off over 60% in the last 12 months, we see the risk/reward as compelling,” Squali added.