Needham & Company Cuts Price Target on Shutterfly (SFLY) Following Mixed 4Q Results
Needham & Company maintained a Buy rating on Shutterfly Inc. (NASDAQ: SFLY), and cut the price target to $50.00 (from $55.00), following the company's 4Q earnings report. Total revenue was $548.1M, up 13% y/y, near top of the guidance range of $528.7-548.7M and above expectations of $544.4M. EBITDA was slightly below expectations. FY16 guidance also fell modestly short of expectations, but Needham expects the historically conservative guidance to move up throughout 2016.
Analyst Kerry Rice commented, "Shutterfly posted mixed 4Q15 results and guidance with overall revenue upside, but EBITDA was slightly below expectations. FY16 guidance also fell modestly short of expectations, but we expect the historically conservative guidance to move up throughout 2016. We believe the key takeaway from management was Shutterfly shifting gears toward cash flow and profitability as it matures, while maintaining solid growth in the high-single digits. We believe longer-term margins should trend upward, benefiting from both manufacturing scale efficiency and a more unified technology platform. SFLY's outgoing CEO indicated that long-term EBITDA margin could reach above 20% long-term, which is over 200 bps above FY15 EBITDA margin."
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Shares of Shutterfly Inc. closed at $39.63 yesterday.