AI Stock Analysis: Is SSTK a Buy?

July 14, 7:49 am

Shutterstock, Inc. (NYSE: SSTK) is a global provider of stock photography, stock footage, stock music, and editing tools. The company services a wide range of customers, including businesses, marketing agencies, and media organizations, by providing access to a comprehensive collection of high-quality digital content. Established in 2003, Shutterstock has grown to become one of the leading resources in the creative industry, continually expanding its digital asset library and investing in technological advancements to enhance their offerings.

Price & AI Score for SSTK.

Fundamental Analysis

Recent financial figures show mixed signals for Shutterstock. The company reported a revenue of $213M for the last quarter. This represents a decrease of 2.44% compared to the previous quarter, raising potential concerns for the short term. Year-over-year, the revenue decreased by 1.39%, which might also be a cause for a cautious outlook.

The net income for the last quarter stood at $16M, a monumental increase of 1,702.49% compared to the previous quarter. This drastic improvement indicates strong profitability growth quarter-over-quarter. However, compared to the same quarter the prior year, net income is down 50.91%, signaling potential challenges in maintaining profit margins over the long term.

EBITDA for the last quarter was $32M. This marks a significant increase of 94.54% compared to the quarter before. Yet, EBITDA is down 37.89% when compared to the same quarter last year. The varying figures highlight potential volatility in the company's financial performance.

Shutterstock's current Price to Earnings (P/E) ratio is 15.2. This is within a standard range in the industry, suggesting that the stock is neither significantly overvalued nor undervalued. Investors should monitor forward P/E ratios alongside growth potentials to make more informed decisions.

Technical Analysis

The current stock price of Shutterstock is $39.36, which has experienced a decline of 2.93% over the past month and a more concerning decline of 26.81% over the past year. These trends suggest investor apprehension and possible challenges facing the company.

Despite these price declines, the stock's trend is bullish as indicated by the Simple Moving Average (SMA10) of 37.02, which is higher than the previous SMA10 of 36.65. This can be indicative of a recent upward movement in stock prices, providing a glimmer of optimism for momentum traders.

The Relative Strength Index (RSI) stands at 25.9, signaling that the stock may be oversold. This suggests a possible buying opportunity for value investors looking for entry points in potentially undervalued stocks.

Alternative Data Analysis

Examining job postings and employee sentiment, Shutterstock currently has 23 open positions, reflecting a 30% decrease over the last few months. This could suggest cost-cutting measures, aimed at improving margins. However, this is not favorable for a company aiming to expand and grow.

Customer acquisition data reveals an estimated 73M visitors to the company's webpage, down by 11% in recent months. A decline in visitor traffic could be a worrying trend, potentially indicating a loss of customer interest or engagement.

On the positive side, Shutterstock’s mobile app downloads are up by 6%, with around 1,400 daily downloads. This trend might indicate new customer acquisition through mobile platforms and potential growth areas.

On social media, the company’s engagement seems flat, with 400,000 Instagram followers and 280,000 Twitter followers, showing no meaningful increase or decrease in recent months. This signals stagnant online customer interest.

Lastly, according to AltIndex's AI scoring model, which leverages a blend of fundamental, technical, and alternative data, Shutterstock has an AI score of 37—a sell signal. This indicator suggests cautiousness in investing in the stock at present.

Conclusion and Recommendation

In summary, Shutterstock presents a mixed case. On the fundamental front, the decrease in revenue and EBITDA year-over-year is concerning, although the massive surge in net income quarter-over-quarter provides a silver lining. Technically, the stock shows signs of being oversold which could present short-term buying opportunities although the larger trend indicates declines. Alternative data points to declining web traffic and job postings, alongside stagnant customer engagement on social media, suggesting potential challenges in sustaining growth.

Given the mixed signals from fundamentals, technical analysis, and alternative data, Shutterstock’s current position appears cautious. The AI score of 37 also supports a sell recommendation. Thus, for investors with a short-term horizon, it might be wise to hold off on buying until there are clearer indicators of sustained growth and stability. Long-term investors should also review subsequent earnings reports and growth strategies before making any commitments.

Disclaimer: This article, generated by an experimental AI tool, is for informational purposes only and not financial advice. Information is based on publicly available data and may not always be accurate or current. Visit SSTK AI Stock Analysis for a more up-to-date analysis.

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