Today, I want to take a look at Shutterstock (NYSE: SSTK ), and understand why I rate the company as a BUY. My thesis is that even though AI is taking over the image services market, as AI images still I am a value dividend investor with an eye for heavy long term compounding. Whenever I see a company that is heavily undervalued with large upside, I always jump in to take my share of the riches. I have been investing since I can remember, specialising in long term growth dividend companies, so that one day ...

Core Viewpoint - Getty Images Holdings, Inc. and Shutterstock, Inc. have received a Second Request from the U.S. Department of Justice regarding their proposed merger, which will extend the regulatory waiting period until compliance is achieved [2][3] Company Overview - Getty Images is a leading global visual content creator and marketplace, serving customers worldwide through its brands including Getty Images, iStock, and Unsplash [5][6] - The company collaborates with over 576,000 content creators and maintains a vast photographic archive, covering more than 160,000 events annually [6] - Getty Images is integrating generative AI technologies to enhance its content offerings, allowing customers to create visuals using text-to-image generation [7] Shutterstock Overview - Shutterstock is a premier partner for brands and digital media companies, offering a comprehensive platform for licensing a diverse collection of content, including 3D models, videos, and illustrations [9] - The company emphasizes product innovation and provides an all-in-one content editing platform and studio production services [9] Merger Details - The proposed merger is subject to regulatory clearance and stockholder approval, with expectations for completion in the second half of 2025 [4] - Both companies are committed to cooperating with the DOJ and other regulators to expedite the merger process [4]

NEW YORK, April 02, 2025 (GLOBE NEWSWIRE) -- Getty Images Holdings, Inc. (NYSE: GETY) and Shutterstock, Inc. (NYSE: SSTK) today announced the companies have each received a Request for Additional Information and Documentary Material (Second Request) from the U.S. Department of Justice (DOJ) in connection with Getty Images’ proposed merger with Shutterstock. The Second Request was issued under notification requirements of the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976, as amended. The effect ...

I’m Jason Ditz and I have 20 years of experience in foreign policy research. My work has appeared in Forbes, Toronto Star, Minneapolis Star-Tribune, Providence Journal, Washington Times and the Detroit Free Press, as well as American Conservative Magazine and the Quincy Institute for Responsible Statecraft. I have been writing investment analysis, with a focus on deep-discount value plays, for over 25 years. I I got my start analyzing securities for a stock-picking contest on the now defunct StockJungle in ...

Core Insights - The article compares Shutterstock (SSTK) and RELX PLC (RELX) to determine which stock offers better value for investors [1] - Both companies currently hold a Zacks Rank of 2 (Buy), indicating a positive earnings outlook due to favorable analyst estimate revisions [3] Valuation Metrics - SSTK has a forward P/E ratio of 3.67, significantly lower than RELX's forward P/E of 28.41 [5] - SSTK's PEG ratio is 0.45, while RELX's PEG ratio stands at 2.58, suggesting SSTK is more undervalued relative to its expected earnings growth [5] - SSTK's P/B ratio is 1.33, compared to RELX's P/B of 19.84, further indicating SSTK's superior valuation metrics [6] Value Grades - SSTK has received a Value grade of A, while RELX has a Value grade of D, highlighting SSTK as the more attractive option for value investors [6][7]

Core Viewpoint - The performance of Shutterstock's international operations is crucial for assessing its financial resilience and growth prospects, especially in a tightly interconnected global economy [1][2][3] Group 1: Financial Performance - Shutterstock's total revenue for the quarter ended December 2024 was $250.31 million, reflecting a 15.2% increase [4] - Revenue from the Rest of the World was $59.26 million, accounting for 23.68% of total revenue, which was a surprise of +1.56% compared to analysts' expectations [5] - Europe contributed $67.45 million, making up 26.95% of total revenue, exceeding the consensus estimate by +1.37% [6] Group 2: Future Revenue Expectations - Analysts project Shutterstock's total revenue for the current fiscal quarter to be $262.1 million, indicating a 22.3% increase from the prior-year quarter [7] - For the full year, total annual revenue is expected to reach $1.06 billion, marking a 13.3% increase compared to last year [8] Group 3: Market Dynamics - The reliance on international markets presents both opportunities and challenges for Shutterstock, making it essential to track international revenue trends for future projections [9] - Financial analysts are closely monitoring international developments to refine earnings estimates for companies operating across borders [10]

Shutterstock (SSTK) came out with quarterly earnings of $0.67 per share, missing the Zacks Consensus Estimate of $0.92 per share. This compares to earnings of $0.72 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -27.17%. A quarter ago, it was expected that this online marketplace for royalty-free images and videos would post earnings of $1.06 per share when it actually produced earnings of $1.31, delivering a surprise of 23.5 ...

Financial Performance - Total revenue for the year ended December 31, 2024, was $935.262 million, an increase of 6.9% from $874.587 million in 2023[15] - Content revenue was $760.011 million, a slight increase from $737.264 million in 2023, while Data, Distribution, and Services revenue rose significantly to $175.251 million from $137.323 million[15] - Revenue increased from $827.8 million in 2022 to $874.6 million in 2023, and projected to reach $935.3 million in 2024, indicating a growth trend[121] Acquisitions and Mergers - The company completed the acquisition of Envato for approximately $250 million on July 22, 2024, enhancing its offerings in digital assets and templates[25] - The acquisition of Backgrid for approximately $20 million on February 1, 2024, expanded Shutterstock's editorial content capabilities in celebrity and live events[24] - The merger agreement with Getty Images, announced on January 6, 2025, includes cash consideration of $9.50 per share and 9.17 shares of Getty Images common stock for each share of Shutterstock[16] - The proposed Merger with Getty Images is subject to various closing conditions, including regulatory approvals and stockholder approval, which may delay or prevent completion[82] - The company faces risks related to the proposed merger with Getty Images, which could materially affect its financial condition and operating results[75] Customer Base and Engagement - Over 4.0 million customers in more than 150 countries licensed content in 2024, with 51% of revenue coming from North America[31] - The company’s diverse customer base is reflected in the fact that its top 25 customers accounted for less than 20% of total revenue in 2024[31] - The majority of customers engage through self-service digital properties, with subscription-based plans available on a monthly or annual basis[32] - The company has seen increased demand for monthly subscription products, allowing customers to download a fixed number of content licenses without incremental costs[33] Marketing and Customer Acquisition - The company’s marketing efforts, which include various digital strategies, have represented a significant percentage of revenue, driving customer acquisition[29] - Marketing efforts, including SEO and online advertising, have represented a significant percentage of revenue, driving customer acquisition[49] - The company’s brand awareness is crucial for attracting and retaining customers, and significant resources are allocated to advertising and marketing efforts[109] Technology and Innovation - Proprietary AI technology is used to evaluate content submissions efficiently, improving the review process and reducing time[36] - The company continuously invests in technology to enhance existing products and develop new services, viewing these investments as integral to long-term success[48] - The company is increasingly integrating AI into its offerings, which presents risks related to costs, market acceptance, and potential legal liabilities[115] Regulatory and Compliance Risks - The company is subject to evolving U.S. and foreign laws regarding privacy and data protection, including the GDPR and CCPA, which impose significant operational requirements and penalties for non-compliance[62] - The company is subject to various government regulations that may impact its business practices, including the Digital Millennium Copyright Act and the Digital Services Act[60] - The company faces potential regulatory investigations and fines due to evolving data privacy laws across various jurisdictions, which could adversely impact financial results[159] Competition and Market Environment - The company operates in a highly competitive industry with significant competitors including Getty Images, AdobeStock, and various free content providers[66] - The company faces intense competition from a diverse range of competitors, including established media companies and emerging AI technologies, which could adversely affect its operating results[97] - The company operates in a highly competitive industry with low barriers to entry, and failure to effectively compete could negatively impact operating results[94] Financial Obligations and Risks - The company has a credit facility that imposes covenants limiting its ability to incur debt and make investments, potentially affecting future capital raising efforts[136] - The company may face limitations in obtaining additional financing for working capital, capital expenditures, or acquisitions due to existing debt covenants[138] - The company’s ability to meet expenses and debt service obligations is contingent on future performance, which may be influenced by various financial and economic factors[138] Employee and Talent Management - The company has a workforce of 1,715 full-time employees as of December 31, 2024, up from 1,274 in 2023, with approximately 57% located in North America[67] - The company has implemented a Total Rewards program that includes competitive pay, medical benefits, and a 401(k) plan to attract and retain talent[69] - Competition for skilled personnel is intense, and failure to attract and retain key employees could hinder growth and operational effectiveness[129] International Operations and Risks - Approximately 55% of the company's revenue for the years ended December 31, 2024, 2023, and 2022 was derived from customers located outside of the United States[174] - The company faces significant foreign exchange risk due to operations in multiple currencies, including the euro, British pound, Australian dollar, and Japanese yen[177] - The company is exposed to risks associated with international operations, including legal and regulatory challenges in foreign markets[175] Intellectual Property and Legal Matters - The company has a portfolio of trademarks and copyrights that are crucial for its business and marketing efforts[57] - The company has successfully recovered infringing domain names in the past and intends to continue enforcing its intellectual property rights[57] - The evolving legal frameworks regarding intellectual property could expose the company to significant indemnification liabilities and third-party claims[149] Economic and Market Conditions - Economic conditions significantly influence advertising spending, which directly affects the company’s revenue and ability to attract new customers[113] - The company’s operating results may fluctuate due to discretionary customer expenditures influenced by economic conditions[70] Shareholder and Stock Information - Following the merger, Getty Images stockholders will hold approximately 54.7% of the combined company, while the company's stockholders will hold about 45.3%[202] - The company has authorized a share repurchase program of up to $100 million, with $30.2 million remaining as of December 31, 2024[205] - The stock price of the company has fluctuated between $25.13 and $128.36 since 2015, indicating potential volatility[198]

Core Insights - Shutterstock achieved record revenues and Adjusted EBITDA in 2024, with expectations for continued growth in 2025 across its Content and Data, Distribution, and Services businesses [2][3][4] Financial Highlights - Full year revenue for 2024 was $935.3 million, an increase of $60.7 million or 7% compared to 2023 [3][4] - Content revenue increased by 3% to $760.0 million, representing 81% of total revenue, while Data, Distribution, and Services revenue grew by 28% to $175.3 million, accounting for 19% of total revenue [4] - Net income for 2024 was $35.9 million, a decrease of $74.3 million from $110.3 million in 2023, primarily due to a non-recurring bargain purchase gain in 2023 [6][10] - Adjusted net income for 2024 was $138.7 million, down from $157.6 million in 2023, impacted by increased interest and tax expenses [7][8] Adjusted EBITDA - Adjusted EBITDA for 2024 was $247.1 million, an increase of $6.3 million or 3% compared to 2023, driven by contributions from the Envato acquisition [9][10] - Adjusted EBITDA margin for 2024 was 26.4%, a decrease of 110 basis points from 27.5% in 2023 [10] Quarterly Results - Fourth quarter revenue was $250.3 million, up 15% from $217.2 million in Q4 2023 [12][13] - Net loss in Q4 2024 was $1.4 million, compared to a net loss of $1.0 million in Q4 2023 [16] - Adjusted net income for Q4 2024 was $23.4 million, down from $25.8 million in Q4 2023 [17][18] - Adjusted EBITDA for Q4 2024 was $59.1 million, an increase of 28% compared to Q4 2023 [19] Liquidity and Cash Flow - Cash and cash equivalents increased by $10.8 million to $111.3 million as of December 31, 2024 [20] - Adjusted free cash flow for 2024 was $108.7 million, a decrease of $29.8 million from 2023 [23] Key Operating Metrics - As of December 31, 2024, Shutterstock had 459,000 subscribers, while Envato had 629,000 subscribers, totaling 1,088,000 [25][26] - Average revenue per customer for Shutterstock was $450, while for Envato it was $90 [26] Merger Agreement - On January 7, 2025, Shutterstock announced a merger agreement with Getty Images, creating a premier visual content company, subject to regulatory approvals and stockholder approval [36]

Core Viewpoint - Shutterstock (SSTK) shows potential for significant upside, with a mean price target of $40.46 indicating a 30.4% increase from its current price of $31.02 [1] Price Targets and Analyst Estimates - The mean estimate consists of four short-term price targets with a standard deviation of $12.50, indicating variability among analysts; the lowest estimate is $28.85 (7% decline), while the highest is $56 (80.5% increase) [2] - A low standard deviation suggests strong agreement among analysts regarding the stock's price movement direction, which can serve as a starting point for further research [7] Earnings Estimates and Analyst Sentiment - Analysts have shown increasing optimism about SSTK's earnings prospects, as evidenced by a positive trend in earnings estimate revisions, which correlates with potential stock price increases [9] - Over the past 30 days, one estimate has increased, leading to a 12.1% rise in the Zacks Consensus Estimate for the current year [10] Zacks Rank and Investment Potential - SSTK holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate factors, indicating strong potential for upside [11] - While consensus price targets may not be entirely reliable, the implied direction of price movement appears to be a useful guide for investors [12]