Digital Consumption And Immersive Tech Will Reshape Visual Media Industry

Key Takeaways

• Getty's strong content portfolio, partnerships, and advanced AI investments position it to outpace competitors in innovation, client retention, and long-term revenue growth.
  
• The potential merger with Shutterstock could consolidate the industry and amplify Getty's margin and operating leverage beyond current expectations.
  
• Disruption from AI, free content, legal risks, and shifting industry trends is pressuring Getty's revenues, margins, and long-term business model sustainability.

Catalysts

Provides creative and editorial visual content solutions in the Americas, Europe, the Middle East, Africa, and Asia-Pacific.

• Analyst consensus anticipates the Shutterstock merger will provide synergy-related upside, but in reality, the combination of Getty's elite proprietary content, dominant sports and editorial franchises, and Shutterstock's tech stack could quickly consolidate the industry, setting the stage for outsized margin and revenue growth that far surpasses current forecasts after regulatory approval.
  
• Analysts broadly expect subscription momentum and high retention to stabilize recurring revenues, but the return of premium access revenue retention above 100% signals accelerating wallet expansion among enterprise clients, pointing to robust, sustainable top-line growth and significant operating leverage.
  
• With global digital content adoption surging across social media, advertising, and video, Getty's expanding premium and exclusive content relationships (such as major sports, entertainment, and news events) uniquely position the company as the essential supplier for high-value, brand-sensitive customers, materially boosting long-term pricing power and gross margins.
  
• Getty's advanced investments in AI-driven search, tagging, curation, and new embedded AI features within subscriptions (especially iStock and Unsplash+) are building a tech-enabled moat that should drive higher conversion rates, increased average revenue per user, and improved net margins well ahead of industry peers.
  
• The rise of immersive technologies-including AR, VR, and the metaverse-will unlock entirely new, high-value licensing use cases for Getty's vast archives; with deep partnerships in place and trusted IP protection, Getty is positioned to dominate the next waves of content monetization and deliver a step-change in revenue growth.

Getty Images Holdings Future Earnings and Revenue Growth

Assumptions

• This narrative explores a more optimistic perspective on Getty Images Holdings compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
• The bullish analysts are assuming Getty Images Holdings's revenue will grow by 2.0% annually over the next 3 years.
• The bullish analysts assume that profit margins will increase from -12.2% today to 9.0% in 3 years time.
• The bullish analysts expect earnings to reach $90.5 million (and earnings per share of $0.21) by about August 2028, up from $-115.4 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 46.9x on those 2028 earnings, up from -6.4x today. This future PE is greater than the current PE for the US Interactive Media and Services industry at 14.0x.
• Analysts expect the number of shares outstanding to grow by 1.07% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 12.32%, as per the Simply Wall St company report.

Getty Images Holdings Future Earnings Per Share Growth

Risks

• The ongoing decline in creative revenue, down 5.1% year-on-year, is primarily attributed to sustained weakness in the agency business, which is heavily exposed to market disruption from free and open-source content as well as AI-generated imagery, putting material pressure on long-term revenue growth.
  
• Increasing SG&A expenses, boosted by significant legal and compliance costs such as litigation with Stability AI and SOX compliance, are raising cost pressures and reducing operating margins, thus likely to erode future net earnings and profitability.
  
• Heightened legal and intellectual property risks, underscored by costly and uncertain outcomes related to global copyright disputes and the use of AI-generated images, may lead to substantial one-off charges, affecting net margins and creating unpredictable financial liabilities.
  
• Flat to declining free cash flow, shown by a swing from positive $31.1 million to negative $9.6 million year-on-year, reflects rising expenses and heavy legal and merger-related outflows, potentially straining liquidity and constraining Getty's ability to invest or adapt to industry changes.
  
• Ongoing secular shifts such as increased industry consolidation, downward pricing pressure from user-generated and microstock platforms, and the pivot in advertising toward short-form video and social media are disrupting the traditional stock photography business model that Getty relies on, threatening both long-term revenue and market relevance.

Valuation

• The assumed bullish price target for Getty Images Holdings is $7.0, which is the highest price target estimate amongst analysts. This valuation is based on what can be assumed as the expectations of Getty Images Holdings's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
  
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $7.0, and the most bearish reporting a price target of just $1.85.
  
• In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be $1.0 billion, earnings will come to $90.5 million, and it would be trading on a PE ratio of 46.9x, assuming you use a discount rate of 12.3%.
  
• Given the current share price of $1.79, the bullish analyst price target of $7.0 is 74.4% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.