Shutterfly (SFLY) Q4 Earnings Preview: What's in the Cards?

Internet-based social expression and personal publishing service provider, Shutterfly, Inc.SFLY is scheduled to report fourth-quarter 2016 numbers on Feb 1, after market close.

Last quarter, the company's loss was narrower than the Zacks Consensus Estimate of loss, which led to a positive earnings surprise of 10.42%. Moreover, the trailing four-quarter average earnings surprise stands at a positive 12.45%.

Let's see how things are shaping up for this announcement.

Shutterfly, Inc. Price and EPS Surprise

Shutterfly, Inc. Price and EPS Surprise | Shutterfly, Inc. Quote

Factors Likely to Influence This Quarter

Shutterfly generally incurs loss in the first three quarters and makes profit in the final quarter of every year because of the seasonal nature of its business. Thus, for the fourth quarter, the company expects earnings per share in the range of $2.57 to $2.86. Net revenue is anticipated to be in the range of $557.0 million to $587.0 million, a year-over-year increase of 1.6% to 7.1%.

Shutterfly's strategic acquisitions, improved offerings in the growing mobile e-Commerce segment, aggressive promotions and easy-to-use products are its strong points and should continue to boost results in the to-be-reported quarter. The company's Shutterfly 3.0 initiative, under which it aims to create a platform and device-agnostic memory management as well as personalized e-commerce solution, should further drive the quarter's performance.

However, higher costs associated with strategic initiatives to increases its production capacity may somewhat hamper the quarter's profits, while unfavorable travel industry and consumer spending trends might limit revenue growth.

Earnings Whispers

Our proven model does not conclusively show that Shutterfly is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. Unfortunately, that is not the case here as elaborated below. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks ESP : Shutterfly has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate is pegged at $2.73.

Zacks Rank : Shutterfly has a Zacks Rank #3, which increases the predictive power of ESP. However, the company's 0.00% ESP makes surprise prediction difficult.

Meanwhile, we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Here are some restaurant companies to consider as our model shows that they have the right combination of elements to post an earnings beat this quarter:

GoDaddy Inc. GDDY has an Earnings ESP of +12.50% and a Zacks Rank #3. You can see the complete list of today's Zacks #1 Rank stocks here .

Splunk Inc. SPLK has an Earnings ESP of +12.28% and a Zacks Rank #3.

Asure Software, Inc. ASUR has an Earnings ESP of +11.11% and a Zacks Rank #3.

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Shutterfly, Inc. (SFLY): Free Stock Analysis Report

Asure Software Inc (ASUR): Free Stock Analysis Report

Splunk Inc. (SPLK): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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