Getty Images Director Buying Stock (GYI)

From Insider Score: Shares of Getty Images (GYI) are getting a much needed boost today, gaining more than 2% after a longtime director at the company stepped up with his first real open market buy. James Bailey, a director at GYI since 1996 (including its predecessor company) and the co-founder and senior managing director of investment consulting firm Cambridge Associates, bought 10K shares at $60.09 on May 10th.

Bailey had previously purchased 100 shares at $62.51 for his son on April 28th, and his buys are the first by any GYI insider in more than three years. According to its website, Cambridge Associates provides "unbiased information and advice on financial and investment issues to endowed nonprofit institutions and private clients."

Shares of GYI are currently trading about -34% off of their November 2005, all-time high of $95.43. More recently, the stock is down more than -20% since the beginning of March, and about -15% since the beginning of April. GYI shares have been under pressure since January, after the company guided below consensus for the first quarter despite a better-than-expected Q4.

Late last month, the stock took another hit when GYI reported in-line Q1 results and issued downside Q2 earnings guidance (60 cents to 62 cents EPS vs. 66 cents consensus). Despite the near-term forecast, GYI said it expected to earn $2.56 to $2.63 per share for FY2006, compared to a consensus of $2.60, and the company also said it sees revenues for the year coming in at $830M to $850M, compared to analyst forecasts of $834M.

Despite the upside forecast for the full year, Piper Jaffray downgraded GYI from "outperform" to "market perform" and cut its target on the stock from $100 to $83, citing a "more challenging environment for the Royalty Free segment." Bear Stearns followed suit, downgrading the stock from "outperform" to "peer perform," with analyst James Ballan citing unexpected cost increases and an "increasingly competitive landscape that is having a greater-than-expected impact on earnings and cash flow growth."

"Changes to the competitive landscape are not totally within Getty's control," Ballan said. "We expect GYI shares to be weak until the company proves these issues are resolved."

Despite the negative analyst sentiment, GYI was upbeat in its earnings release.

"Revenue for the quarter surpassed $200 million for the first time in our history," said Jonathan Klein, co-founder and chief executive officer. "Record results in our largest business, rights-managed imagery, and strength in international regions contributed to this quarter's strong results with growth rates in non-English speaking countries far exceeding our overall growth rate. We are also delighted to have recently acquired the leading social media provider of imagery, istockphoto.com, as well as our largest image partner, Stockbyte, whose fast-growing royalty-free collections are entirely wholly-owned. Looking ahead, we are as confident as ever in our ability to continue to grow the market and take share."

Worth Noting: Three GYI executives have sold stock since the company's April 20th earnings report, but the sales have only totaled 3.6K shares. Over the past few years, GYI has unexpectedly found itself fending off competition from an unlikely source, Jupitermedia (JUPM). The firm, which was best known for its online media properties, trade shows, and research services, has aggressively moved into the licensed images space.