) hit its 52-week high of $45.90 on Apr 12 and eventually closed
at $44.97, generating a return of approximately 45.8%
year-to-date. Shutterfly's shares have been riding high since it
reported solid fourth quarter results on Feb 5. Average volume of
shares traded over the last three months came in at approximately
Factors Driving Momentum
A strong business model, a string of acquisitions and
potential for future share growth boosted the shares of this
Internet-based social expression and personal publishing service
Shutterfly offers innovative products and services and has
ample manufacturing capacity. Shutterfly's fourth-quarter 2012
earnings of $1.40 per share breezed past the Zacks Consensus
Estimate by 38.6% and the year-ago result by 44.3%. Increased
revenues (up 33%) along with efficient cost containment led to
Shutterfly is focused on growing its business through
strategic partnerships with retailers and through acquisitions.
Some of Shutterfly's latest acquisitions include ThisLife in Jan
2013; Fuji Film's photo creating and sharing website SeeHere.com
in Oct 2012 and Kodak Gallery online photo services (formerly
known as Ofoto) in May 2012. Management also expects Kodak to
deliver a significantly higher EBITDA margin in fiscal 2013.
The company's market share is growing steadily. Its market
leading position is driven by its ability to launch new products
and services, expand its customer base, improve operational
efficiency and seamlessly integrate related acquisitions.
According to InfoTrends, Shutterfly accounts for around 50% to
52% of the present market.
The increasing use of digital cameras, largely driven by price
decreases, has led to heightened demand for online photo printing
services, which leaves ample scope for Shutterfly's expansion.
The company also remains committed towards launching services
like one-to-one greeting card service, thus beefing up its
Shutterfly is scheduled to report its first quarter 2013
earnings early next month. This company currently carries a Zacks
Rank #1 (Strong Buy) and a positive earnings ESP (Read:
Zacks Earnings ESP: A Better Method
) of +4.88%. This indicates a likely positive earnings
Other Stocks to Consider
Stocks that are performing well and are worth considering in
the Internet-based business services sector include
Angie's List Inc.
Giant Interactive Group Inc.
Perion Network Ltd
). All three stocks carry a Zacks Rank #2 (Buy).
GIANT INTERACTV (GA): Free Stock Analysis
PERION NETWORK (PERI): Get Free Report
SHUTTERFLY INC (SFLY): Free Stock Analysis
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