By midmorning, shares had taken off 5.7% to $47.58. Trading volume of 1.6 million had exceeded its three-month daily average.
Cowen downgraded the Redwood City, Calif.-based business to "underperform" from "outperform" and downwardly revised its target price to $39 from $57.
In its most recent earnings report, Shutterfly management projected a March-ending quarterly loss of between 86 cents and 92 cents a share
Management intends to invest heavily over 2014 in additional infrastructure as it seeks to expand its most profitable segment, producing physical albums and greeting cards from users' online photos. Operating expenses are set to increase on the additional investments and consolidates its four Arizona-based factories into one.
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TheStreet Ratings team rates SHUTTERFLY INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate SHUTTERFLY INC (SFLY) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. 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 and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity."