fbpx
QQQ
+ 0.00
341.01
+ 0%
DIA
-0.02
340.78
-0.01%
SPY
+ 0.15
421.96
+ 0.04%
TLT
+ 0.00
140.93
+ 0%
GLD
-0.02
171.13
-0.01%

Barclays: Big Photo-Sharing Partner Could Bolster Shutterfly's Weak Consumer Growth

by
July 28, 2016 5:22 pm
Share to Linkedin Share to Twitter Share to Facebook Share to Print License More

Shares of Shutterfly, Inc. (NASDAQ: SFLY), a provider of personalized photo-based and other products and services, surged to a new 52-week high of $54.60 on Thursday after the company reported a better-than-expected second quarter print.

Christopher Merwin of Barclays commented in a note that Shutterfly's new management team remains focused on the Shutterfly 3.0 transition, which includes the integration of photo sharing service ThisLife and a new mobile app later this year.

Meanwhile, Shutterfly grew its enterprise-related revenue in the most recent quarter by 117 percent, but consumer growth slowed to just 3 percent from 10 percent in 2015.

EBITDA margins of 9 percent in the recent quarter was ahead of the analyst's expectations of 6 percent. The analyst added that he expects full year fiscal 2016 margins to improve 100 basis points year-over-year to 19.2 percent. Longer-term margins remain unclear, especially if the lower-margin enterprise segment outpaces the slower growing consumer segment.

In addition, Merwin cautioned that the Shutterfly 3.0 concept represents a "long road to get back to double digit growth" for the consumer segment. As such, a partnership with a larger photo sharing site could be beneficial and become a "necessary catalyst" to achieve an acceptable rate of growth.

Shares remain Equal-Weight rated with a price target raised to $48 from a previous $45.

For the latest in financial news, exclusive stories, memes follow Benzinga on Twitter, Facebook & Instagram. For the best interviews, stock market talk & videos, subscribe to our YouTube channel.


Related Articles

Lifetouch Acquisition Is A Game Changer For Shutterfly, Goldman Sachs Says In Upgrade

Time To Take Profits In Shutterfly? Goldman Sachs Downgrades

Trouble At Shutterfly? Raymond James Analyst Goes Against Wall Street Crowd With Downgrade

Apollo Global Acquires Shutterfly: 2 Analyst Takes