Why Shutterstock Inc Shares Went Dark Today

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Shutterstock Inc plunged more than 10% Friday morning, then partially recovered to trade down around 6% after the licensed imagery provider released mixed first-quarter results.

So what: Quarterly revenue grew 42% year over year to $72.8 million, which translated to 10% growth in adjusted income to $7.1 million, or $0.20 per share. Analysts, on average, were looking for slightly higher earnings of $0.21 per share on lower sales of $69.71 million. Meanwhile, adjusted earnings before interest, taxes, depreciation, and amortization were $14.2 million, compared to $11.8 million this time last year.

In addition, for the current quarter, Shutterstock sees revenue of $76 million to $78 million, with adjusted EBITDA of $14 million to $15 million. On the revenue front, that's once again above analysts' estimates for sales of $74.46 million.

Finally, for the full year, Shutterstock expects revenue of $315 million to $320 million, compared to estimates that call for 2014 revenue of $310.1 million. Shutterstock also lowered both ends of its adjusted 2014 EBITDA range by $2 million to $66 million to $68 million -- though the revised figures include a $1 million increase in Shutterstock's expectations, offset by a $3 million investment in its recently acquired WebDAM operations.

Now what: Shutterstock's top line is still growing nicely, and its bottom-line shortfall wasn't that significant. But however small the miss, the stock was priced for perfection going into the report, and I think the market was right in taking a step back today. Heck, even after today's plunge, shares still trade around 10 and 83 times last year's sales and earnings, respectively, and 44 times next year's estimated earnings. In the end, I still think Shutterstock is a solid, thriving business over the long term, but investors shouldn't be willing to buy it at any price.

Top dividend stocks for the next decade
If fast-growing stocks like Shutterstock are too volatile for you, why not put your money to work in something a little more stable? The smartest investors know that dividend stocks simply crush their non-dividend paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.

The article Why Shutterstock Inc Shares Went Dark Today originally appeared on Fool.com.

Steve Symington has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story