Shutterstock, Inc. Just Missed EPS By 79%: Here's What Analysts Think Will Happen Next

Last week, you might have seen that Shutterstock, Inc. (NYSE:SSTK) released its second-quarter result to the market. The early response was not positive, with shares down 7.0% to US$37.71 in the past week. Revenue of US$220m surpassed estimates by 3.1%, although statutory earnings per share missed badly, coming in 79% below expectations at US$0.10 per share. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Shutterstock

Taking into account the latest results, the most recent consensus for Shutterstock from six analysts is for revenues of US$930.8m in 2024. If met, it would imply a satisfactory 5.2% increase on its revenue over the past 12 months. Per-share earnings are expected to leap 34% to US$1.78. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$920.4m and earnings per share (EPS) of US$2.13 in 2024. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a real cut to EPS estimates.

It might be a surprise to learn that the consensus price target fell 5.5% to US$55.40, with the analysts clearly linking lower forecast earnings to the performance of the stock price. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Shutterstock analyst has a price target of US$65.00 per share, while the most pessimistic values it at US$35.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Shutterstock's past performance and to peers in the same industry. The analysts are definitely expecting Shutterstock's growth to accelerate, with the forecast 11% annualised growth to the end of 2024 ranking favourably alongside historical growth of 7.7% per annum over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 10% per year. Shutterstock is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Shutterstock. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Shutterstock going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 3 warning signs for Shutterstock that you need to be mindful of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.