Sharing – the new mantra
Online photo-sharing service Shutterfly, Inc. (NASDAQ:SFLY) also reported an encouraging set of financial numbers. First quarter revenues grew 28 percent to $116.7 million from $109.7 million a year ago, surpassing Street expectations as more users opted for photo prints during the quarter. Even though net losses widened to $12.4 million during the quarter from $10 million in first quarter of 2012, it was better than projections of the company losing $15 million. Right after the results, brokerage houses raised their price targets on the stock.
Needham raised its target by $2 to $54, and so did Cantor Fitzgerald, which now has a target of $50. These indicate room for further growth from current price level of $44 – $45. The company has zero debt business operations and competes with Hewlett-Packard’s Snapfish, Webshots and other websites offering capabilities to share images and create photobooks, cards and albums.
Foolish bottom line
Traditional valuation metrics fail to do justice when it comes to valuing these new economy businesses and investors still need to trust their guts and some headline numbers to make investment decisions. Increased user base and the ability to monetize traffic remain the most important indicators. In this vein, Shutterfly, Inc. (NASDAQ:SFLY) scores the highest with its solid business model.
The article Internet Stocks Posting Strong Results originally appeared on Fool.com and is written by Jacob Wolinsky.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.