Market Summary

 

Earning Reports

Total Companies: (37) Stock Center View

Symbol Price EPS
Est.
Reporting
Time
BYI 1.22 After Mkt
CCUR N/A After Mkt
CFI 0.35 After Mkt
CWST -0.01 After Mkt
EXA -0.03 After Mkt
FN 0.35 After Mkt
GEF 0.84 After Mkt
GES 0.29 After Mkt
GMAN -0.15 After Mkt
KZ N/A After Mkt
LCI 0.58 After Mkt
TLYS 0.05 After Mkt
VMEM -0.22 After Mkt
VNET 0.59 After Mkt
WDAY -0.14 After Mkt
WSM 0.53 After Mkt
BRLI 0.53 Before Mkt
BWS 0.35 Before Mkt
CHS 0.26 Before Mkt
DCI 0.47 Before Mkt
ELTK N/A Before Mkt
EXPR 0.00 Before Mkt
ISLE 0.02 Before Mkt
SXI 1.12 Before Mkt
TIF 0.85 Before Mkt
ARX 0.30 Unknown
COCO 0.11 Unknown
DHT -0.12 Unknown
DLIA N/A Unknown
DNDN N/A Unknown
EDMC -0.14 Unknown
ESI 0.71 Unknown
I 0.51 Unknown
NADL 0.24 Unknown
SDLP 0.67 Unknown
SDRL 0.74 Unknown
UNTK N/A Unknown

Today's Earnings Stocks Highlights

Symbol Name Last Change Volume EPS
Est.
Reporting
Time
Market
Cap
SDRL Seadrill Limited 36.63 -1.04 (-2.76%) 8.51M 0.74 Unknown 17.18B
WDAY Workday, Inc. 90.30 -0.48 (-0.53%) 2.66M -0.14 After Mkt 16.70B
TIF Tiffany & Co. 101.75 0.98 (0.97%) 4.64M 0.85 Before Mkt 13.13B
← Gold and Silver Gap Closing Earnings Season Kickoff →

Clipping The Wings of Shutterfly

Posted on 2011-10-05 by Daniel Ho

ShutterflyBy releasing only an iPhone 4S instead of an iPhone 5, Apple (NASDAQ: AAPL) had greatly disappointed investors, and its stock dropped more than 5% in the next few hours following its announcement. The buy program at the last hour helped saved everyone, including Apple, which only lost less than 1% when the market closed. Lost in the news was the carnage on Shutterfly (NASDAQ: SFLY), an online photo printing company, when Apple announced its Cards app, a built-in iphone app that allows iphone users to send a physical greeting card to someone from the iPhone for $2.99 in the US, and $5.99 internationally. This little piece of news caused Shutterfly to drop almost 20% before rebounding to lose only ~2% for the day.

Shutterfly is one of the most successful online photo printing company, which went public in 2006, and had grown riding the wave of digital photography, the mirror image of Kodak (NYSE: EK) ruined by the same trend. IPO'ed at $15/share, it continued to rise to $35/share in 2007, before it declined to a low of $6.25/share in 2009 at the height of the financial crisis. Since then, like the stock market, it started rising and traded as high as $63.47 in July this year. However, it started to decline from that point, and not long afterwards, it lowered Q3 guidance on Jul 27 and the stocks accelerated its decline. It rebounded in September but could not defy the market's fall, and closed at $40.31 before Apple tried to ruin its stock.

We are not sure how Apple's Cards app will affect Shutterfly, but we know that investors are certainly jumpy on their investments. Online printing, while a growing market, is quite competitive, with many players in it, such as Kodak Gallery, Costco (NASDAQ: COST), Snapfish, etc. Currently trading at a P/E of 75 and a forward P/E of 37, Shutterfly is clearly a growth stock, and it will need all the growth it needs to sustain its stock price. Meanwhile, management has been selling the stocks since it started recovering from the financial crisis.

Although the recent market swoon has taken down many sectors, consumer retail is one that had performed much better than the others. There is high expectation that US consumer spending will keep up, but that can change in a heartbeat if Europe's debt problem cause European banks to lock up, and proceed to spread to the US. With the company reporting earnings at the end of October, we believe another disappointment like last quarter combined with high nervousness of investors will simply devastate the stock. For those who go long on Shutterfly, it'd be much better to hedge downside through options. For those who are adventurous, we believe shorting the stock can potentially deliver handsome return.

Position: Short SFLY

This article originally appears on benzinga.com

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