Shutterfly Inc. (SFLY): Today's Featured Internet Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Shutterfly ( SFLY) pushed the Internet industry lower today making it today's featured Internet laggard. The industry as a whole closed the day up 1.1%. By the end of trading, Shutterfly fell 69 cents (-1.5%) to $44.38 on average volume. Throughout the day, one million shares of Shutterfly exchanged hands as compared to its average daily volume of 933,800 shares. The stock ranged in price between $44.23-$45.43 after having opened the day at $45.43 as compared to the previous trading day's close of $45.07. Other companies within the Internet industry that declined today were: Selectica ( SLTC), down 4.6%, LookSmart ( LOOK), down 4.4%, Internet Initiative Japan ( IIJI), down 4%, and SouFun Holdings ( SFUN), down 3.9%.
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Shutterfly, Inc. provides digital personalized photo products and services in the United States. It offers a range of personalized photo-based products and services for consumers to upload, edit, enhance, organize, find, share, create, print, and preserve their memories. Shutterfly has a market cap of $1.64 billion and is part of the technology sector. The company has a P/E ratio of 73.9, above the S&P 500 P/E ratio of 17.7. Shares are up 51% year to date as of the close of trading on Thursday. Currently there are eight analysts that rate Shutterfly a buy, no analysts rate it a sell, and three rate it a hold.

TheStreet Ratings rates Shutterfly as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, expanding profit margins and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

On the positive front, BroadVision ( BVSN), up 22%, MeetMe ( MEET), up 15.7%, Rediff.com India ( REDF), up 12.9%, and ModusLink Global Solutions ( MLNK), up 6.6%, were all gainers within the internet industry with SINA Corporation ( SINA) being today's featured internet industry leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the internet industry could consider First Trust Dow Jones Internet Idx ( FDN) while those bearish on the internet industry could consider ProShares Ultra Short Technology ( REW).

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