Shutterfly Inc’s (NASDAQ:SFLY) Earnings Grew 89.14% In A Year. Was It Better Than Its Long-Term Trend?
Today I will take a look at Shutterfly Inc’s (NASDAQ:SFLY) most recent earnings update (31 December 2017) and compare these latest figures against its performance over the past few years, as well as how the rest of the online retail industry performed. As an investor, I find it beneficial to assess SFLY’s trend over the short-to-medium term in order to gauge whether or not the company is able to meet its goals, and ultimately sustainably grow over time. Check out our latest analysis for Shutterfly
Did SFLY beat its long-term earnings growth trend and its industry?
I prefer to use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This technique enables me to analyze many different companies on a similar basis, using new information. For Shutterfly, its latest earnings (trailing twelve month) is US$30.09M, which, against last year’s figure, has increased by an impressive 89.14%. Since these figures may be somewhat myopic, I have computed an annualized five-year value for SFLY’s earnings, which stands at US$5.55M This shows that, generally, Shutterfly has been able to steadily grow its profits over the past few years as well.
How has it been able to do this? Well, let’s take a look at whether it is merely attributable to an industry uplift, or if Shutterfly has seen some company-specific growth. The hike in earnings seems to be bolstered by a solid top-line increase overtaking its growth rate of expenses. Though this resulted in a margin contraction, it has made Shutterfly more profitable. Viewing growth from a sector-level, the US online retail industry has been growing its average earnings by double-digit 26.32% in the past twelve months, and a more muted 9.61% over the previous five years. This means that any tailwind the industry is gaining from, Shutterfly is capable of amplifying this to its advantage.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as Shutterfly gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Shutterfly to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for SFLY’s future growth? Take a look at our free research report of analyst consensus for SFLY’s outlook.
2. Financial Health: Is SFLY’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2017. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
