We expect personalized products and service provider,
), to beat expectations when it reports fourth quarter and full
year 2013 results on Feb 5, 2014. Last quarter, it posted a
positive earnings surprise of 61.29%. Let's see how things are
shaping up for this announcement.
SHUTTERFLY INC (SFLY): Free Stock Analysis
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Why a Likely Positive Surprise?
Our proven model shows that Shutterfly is likely to beat earnings
because it has the right combination of two key ingredients.
Positive Zacks ESP:
Expected Surprise Prediction or
, which represents the difference between the Most Accurate
estimate and the Zacks Consensus Estimate, stands at +5.51%. This
is meaningful and a leading indicator of a likely positive
earnings surprise for shares.
Shutterfly carries a Zacks Rank #1 (Strong Buy). Note that stocks
with Zacks Ranks #1, 2 or 3 have a significantly higher chance of
beating earnings. The Sell-rated stocks (#4 and 5) should never
be considered going into an earnings announcement.
The combination of Shutterfly's Zacks Rank #1 (Strong Buy) and
+5.51% ESP makes us confident about a positive earnings beat.
What is Driving the Better-Than-Expected
Shutterfly's fourth quarter is seasonally the strongest quarter
of the year. The company generates majority of its revenue during
this quarter, which is also the holiday season. Therefore, we
expect the top and bottom lines to improve during the quarter. In
fact, despite posting a loss, the company widened its earnings
guidance during the third quarter. However, the loss incurred was
lower than management's expectation due to an improved top line.
Also, total orders generated went up 8% year over year.
Going forward, management foresees several opportunities ahead as
the social expression and personal publishing markets are still
in a nascent stage. Moreover, its strategic partnerships with
retailers and efforts to develop a successful commercial printing
business bode well for the company's growth.
Shutterfly has witnessed upward movement in estimates in the past
30 days for the fourth quarter as well as for full year 2013.
Other Stocks to Consider
Other stocks in the sector that have both a positive earnings ESP
and a favorable Zacks Rank are:
), with Earnings ESP of + 20.0% and a Zacks Rank #1.
Youku Tudou Inc.
), with Earnings ESP of + 20.0% and a Zacks Rank #2 (Buy).
WebMD Health Corp.
), with Earnings ESP of + 5.56% and a Zacks Rank #3 (Hold).