Shutterstock Downgraded By Jefferies

Posted on 8/31/2017 by Jim Pickerell | Printable Version | Comments (0)

The investment banking firm Jefferies has downgraded Shutterstock shares from Hold to Underperform with a price target of $30.00.

Shutterstock stock price closed today at $33.69 down 20% from $42.14 a month ago. The stock is down 52% from the high of $65.16 that it hit in September 2016.

Five of six other brokerages rate the stock "hold" and the other one rates it as "strong sell." These companies offer a median price target for the stock of $34.50.

Shutterstock has missed its revenue estimates in the last 3 of the last 4 quarters, and there is little expectation in near term improvements.

Most worrysome is that Shutterstock has been able to do little to increase downloads in the last 18 months. In January 2016 they had 41.2 million downloads. In the following quarters the numbers were: 43.4; 41.2; 41.1; 43.5 and 42.7 million consecutively.

Jefferies analysts Brian Fitzgerald said in a note, “Smaller eCommerce subscription offerings are putting pressure on overall downloads, and the company must offset any decrease by improving revenue per download.”

However, in early February Shutterstock felt the need to offer customers smaller, lower priced subscription packages in order to hold onto their business.

Based on 2015 estimates Shutterstock subscription customers were downloading, on average, less than 25% of the images they were allowed. Customers wanted smaller, cheaper subscription packages so they were only paying for what they really used, and Shutterstock gave it to them.

While Shutterstock may need to find a way to raise prices in order to grow revenue, given the pressure from competitors (Getty Images, Adobe Stock and iStock) they don’t seem to be able to do that. While in theory there is now a higher price-per-image-downloaded, the fact that customers are better able to only pay for what they actually need doesn’t seem to be resulting in much additional revenue generated.

Analyst Brent Thill says he is increasingly cautious when it comes to the company's ability to deliver in the near term noting the company has missed estimates on revenue and EBITDA in three of the last four quarters. The analyst expects investments to pressure the company's results although he does acknowledge over the long term the company remains focused. Given his expectation for the stock to underperform the broader Internet index he downgrades it.

Copyright © 2017 Jim Pickerell. The above article may not be copied, reproduced, excerpted or distributed in any manner without written permission from the author. All requests should be submitted to Selling Stock at 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, phone 301-461-7627, e-mail: wvz@fpcubgbf.pbz

Jim Pickerell is founder of, an online newsletter that publishes daily. He is also available for personal telephone consultations on pricing and other matters related to stock photography. He occasionally acts as an expert witness on matters related to stock photography. For his current curriculum vitae go to:  


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