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Shutterstock Still A Buy Despite Adobe Competition, Cantor Says

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In a report published Wednesday, Cantor Fitzgerald analyst Youssef Squali maintained a Buy rating and $100 price target on Shutterstock, Inc. (NYSE: SSTK). The launch of stock image offerings from Adobe Systems Incorporated (NASDAQ: ADBE), while anticipated, is expected to increase competition.

Although it might be too early to estimate the impact of Adobe's entry into the stock imagery domain, the analyst believes that it is unlikely to have a significant impact on Shutterstock, since "a) Adobe's pricing is not disruptive to Shutterstock (as some may have feared) and b) Shutterstock has a superior stand-alone solution for imagery."

"A secular shift to digital stock imagery/content, a differentiated offering, and large addressable market keep us constructive on SSTK," Squali stated.

Adobe had announced on Tuesday that it would offer stock images to Creative Cloud users. This announcement was largely anticipated, given the acquisition of Fotolia about six months ago was made with the aim of offering "a fully integrated solution to graphic designers." Adobe also intends to add video and other formats to the offering soon.

While Adobe's subscription pricing is comparable to that of Shutterstock, the analyst believes that price is not always a determinant of a buyer's decision, as seen in the case of the lower price iStock subscription.

According to the Cantor Fitzgerald report, "We find Adobe's offer of 10 images for $30/mo. to be superior to Shutterstock's offer of 5/$50, but also note that Adobe requires a Creative Cloud subscription. If a response is necessary, we think Shutterstock could increase the number of images in its package and/or introduce additional packages."

In addition, Shutterstock has proven its ability to compete successfully against larger competitors since 2003, with its larger portfolio, superior offering and better search.

"We also believe that Shutterstock will increasingly be introducing more product features to integrate its offering into the customer workflow, which should help it compete more effectively with Adobe," Squali added.

Latest Ratings for SSTK

DateFirmActionFromTo
Oct 2018MaintainsHoldHold
Aug 2018MaintainsHoldHold
Feb 2018MaintainsHoldHold

View More Analyst Ratings for SSTK
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Posted-In: Cantor Fitzgerald Youssef SqualiAnalyst Color Reiteration Analyst Ratings

 

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