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Topeka Initiates Shutterstock, RetailMeNot At Buy

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In separate reports, Topeka Capital Markets analyst Blake T. Harper initiated coverage of two online shopping companies with a Buy rating. The price target of Shutterstock Inc (NYSE: SSTK) was set at $92, while that of RetailMeNot Inc (NASDAQ: SALE) was at $28.

"We expect Shutterstock to continue to take market share from Getty Images in its core images business with Enterprise customers and benefit from further adoption of its Video, Audio and Editorial content," Harper wrote.

The competitive impact from the acquisition of Fotolia by Adobe Systems Incorporated (NASDAQ: ADBE) is likely to be "minimal to Shutterstock," since both the companies benefit from Getty's market share losses.

Harper said that Shutterstock was expected to exhibit strong execution and could grow revenue at a CAGR of about 30 percent, along with generating mid-twenties EBITDA margins, over the next three years.

In their report Topeka Capital Markets noted, "RetailMeNot is the largest online coupon marketplace and largest mobile platform to help retailers promote their products with coupons and discounts. We view the company's large and fast growing mobile audience, along with its improving mobile monetization and a reasonable valuation as reasons to own the stock."

The mobile in-store business has "significant potential" to beat expectations next year and beyond, in view of the overall growth of mobile device usage while shopping as well as "our conversations with retailers, who are all in various stages of testing and deployment of different types of in-store promotions," Harper commented.

Latest Ratings for SSTK

Nov 2017JefferiesMaintainsUnderperform
Aug 2017JefferiesDowngradesHoldUnderperform
Aug 2017SunTrust Robinson HumphreyInitiates Coverage OnHold

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Posted-In: Topeka Capital MarketsAnalyst Color Initiation Analyst Ratings


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