Why Shutterfly (SLFY) Stock Is Spiking Today

NEW YORK (TheStreet) -- Shutterfly (SFLY) was gaining 5.3% to $50.04 Monday following reports that private equity firm Silver Lake Partners is in advanced talks to acquire the photo sharing company.

Silver Lake is reportedly in talks to buy the company for more than $50 a share, according to FinancialJuice.

Recent reports said that other private equity firms including Bain Capital and Hellman & Friedman were interested in acquiring Shutterfly, according to Bloomberg.

Must Read: Warren Buffett's 25 Favorite Stocks

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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, good cash flow from operations and expanding profit margins. 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."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 7.2%. Since the same quarter one year prior, revenues rose by 19.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has slightly increased to $12.28 million or 3.01% when compared to the same quarter last year. In addition, SHUTTERFLY INC has also modestly surpassed the industry average cash flow growth rate of 0.27%.
  • Despite currently having a low debt-to-equity ratio of 0.34, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 3.36 is very high and demonstrates very strong liquidity.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet & Catalog Retail industry. The net income has significantly decreased by 129.0% when compared to the same quarter one year ago, falling from -$11.81 million to -$27.05 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Internet & Catalog Retail industry and the overall market, SHUTTERFLY INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: SFLY Ratings Report

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

More from Markets

Intel Gets a Downgrade Following CEO Resignation

Intel Gets a Downgrade Following CEO Resignation

Dow Falls Sharply as Wall Street Weighs Trump's New Trade Threats

Dow Falls Sharply as Wall Street Weighs Trump's New Trade Threats

Jim Cramer: Reports of Attempted Trade Truce With China Are False

Jim Cramer: Reports of Attempted Trade Truce With China Are False

Ford and General Motors 'Notably Vulnerable' to Trade War: Moody's

Ford and General Motors 'Notably Vulnerable' to Trade War: Moody's

Video: Here's When Investors May Start to Withstand Tough Trade Talk

Video: Here's When Investors May Start to Withstand Tough Trade Talk