Dec. 9 at 8:26 PM
$SSTK
It may be time for a deeper dive into what Shutterstock has to offer at this price point.
I remember this company from when I was a teenager using it in school and do truly believe that it will not disappear.
Revenue has been steadily growing and net income is still high, after a slump last year.
P/E is currently 10.77: 3, 5, and 10yr averages are 20.8, 26.1, 39.4.
Using the midpoint of the 3yr and 5yr for a hand-wavey thesis of P/E reversion to the mean, indicates perhaps a longer term upside of ≈ 23.5/10.77 = 2.18
= 118% upside.
=
$39.5 a share
Seems a slightly ludicrous target but actually if you were to zoom out then you’d see we were trading at
$42, just 17 months ago. Feeling as if it’s very oversold.
The other thing to note is the downside to the 52W lows (≈
$14), where I’d presume there’s now some fairly heavy liquidity waiting to snap up any further 15-25% declines.
A reversal should come, at least by the time this merger resolves, and by then it will be too late.
