Market Overview

Jefferies Issues Massive Downgrade On Shutterstock

Share:

Jefferies, which previously had a $90 price target and Buy on Shutterstock Inc (NYSE: SSTK), just cut the stock from Buy to Hold with a $39 price target, a price that's 13.5 percent above the current price of $34.35.

The downgrade was led by competitive pressures, particularly led by Adobe Systems Incorporated (NASDAQ: ADBE). Analyst Brian Fitzgerald said in the research note that Adobe "is more aggressively pursuing the space which makes us more uncertain about the outlook."

Year-to-date, Shutterstock has declined 50 percent, compared with a 12.6 percent increase in Adobe.

Despite the bearish downgrade, Fitzgerald said there were "meaningful positives in the quarter" that "still support the bull case." Notably, these positives include the fact that 22 percent of revenue is derived from the enterprise offering, revenue retention rates for the quarter were more than 100 percent, and paid downloads gained 14 percent with revenue per download up 13 percent.

Fitzgerald wondered if Shutterstock is tone deaf to Adobe's competition. In June, Adobe launched Adobe Stock with "discounted bundled pricing for stock imagery." Even in the face of that, "Shutterstock management has stated it will not lower its pricing to compete with Adobe," the note pointed out.

Jefferies' $39 price target reflects a 10-year discounted cash flow model.

Latest Ratings for SSTK

DateFirmActionFromTo
Oct 2018Deutsche BankMaintainsHoldHold
Aug 2018Deutsche BankMaintainsHoldHold
Feb 2018Deutsche BankMaintainsHoldHold

View More Analyst Ratings for SSTK
View the Latest Analyst Ratings

 

Related Articles (ADBE + SSTK)

View Comments and Join the Discussion!

Posted-In: adobe systems Brian Fitzgerald Jefferies ShutterstockAnalyst Color Downgrades Price Target Analyst Ratings

Latest Ratings

StockFirmActionPT
MVBFPiper SandlerMaintains13.0
BACUBSMaintains20.0
TRPUBSMaintains68.0
STFCPiper SandlerMaintains24.0
KINSPiper SandlerMaintains7.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com