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Amazon's Launch Of 'Prints' Likely To Be An Overhang For Shutterfly Shares

Amazon's Launch Of 'Prints' Likely To Be An Overhang For Shutterfly Shares
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Kohl's & Nielsen on Amazon & Netflix: 'If You Can't Beat 'em, Join 'em' (GuruFocus), Inc. (NASDAQ: AMZN) has launched a service that already allows Amazon Drive members to order prints and photo books, and will shortly allow these members to order stationary cards and wall calendars. The launch of Amazon Prints could be an overhang on Shutterfly, Inc. (NASDAQ: SFLY) stock, Axiom’s Victor Anthony said in a report.

Anthony maintained a Hold rating on Shutterfly, with a price target of $52. The latest launch by Amazon follows speculations of Alphabet Inc (NASDAQ: GOOGL) introducing photo creation features in its Photo App.

Impact On Shutterfly Shares

Since Amazon’s offering is limited so far, the near-term impact on Shutterfly’s revenues and profits is likely to be muted, Anthony commented. He added that the latest launch would not have a meaningful impact on Shutterfly’s performance in the critical Q4 holiday season. The process of uploading photos onto Amazon Drive is cumbersome.

The analyst mentioned, however, that Amazon Prints would likely be “an overhang on the stock,” which would be similar to when Apple Inc. (NASDAQ: AAPL) had launched a photo print feature.

“Hard to tell whether Amazon will pursue this as a category expansion or just an added feature. If Amazon does invest resources in Prints, then the added competition would exert an element of pricing pressure on the industry in the long run,” Anthony wrote.

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