Shutterstock, Inc. Just Beat EPS By 254%: Here's What Analysts Think Will Happen Next

Simply Wall St
·3 min read

Shutterstock, Inc. (NYSE:SSTK) just released its quarterly report and things are looking bullish. It was overall a positive result, with revenues beating expectations by 2.7% to hit US$165m. Shutterstock also reported a statutory profit of US$0.62, which was an impressive 254% above what the analysts had forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Shutterstock

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Taking into account the latest results, the current consensus from Shutterstock's five analysts is for revenues of US$703.1m in 2021, which would reflect a satisfactory 7.8% increase on its sales over the past 12 months. Statutory earnings per share are predicted to leap 35% to US$1.91. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$706.1m and earnings per share (EPS) of US$1.26 in 2021. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the sizeable expansion in earnings per share expectations following these results.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 22% to US$76.60. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Shutterstock analyst has a price target of US$85.00 per share, while the most pessimistic values it at US$65.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Shutterstock'shistorical trends, as next year's 7.8% revenue growth is roughly in line with 9.4% annual revenue growth over the past five years. Compare this with the wider industry (in aggregate), which analyst estimates suggest will see revenues grow 18% next year. So it's pretty clear that Shutterstock is expected to grow slower than similar companies in the same industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Shutterstock's earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Shutterstock's revenues are expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Shutterstock going out to 2024, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 3 warning signs for Shutterstock that you should be aware of.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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