Shutterfly (SFLY) shares received a boost Friday morning from Cowen Analyst Jim Friedland, who boosted his rating on the online photo services site to Outperform from Neutral.
Friedland offers five reasons for his more bullish stance:
- Rev growth expected to accelerate from 3% in 2009 to 20% in 2011 driven by economic recovery.
- The company is maintaining/extending its lead in personalized product design features and services over Hewlett-Packard’s Snapfish and Kodak Gallery, which should drive market share gains as consumers shift away from traditional prints.
- Pricing has remained stable for the pats 8 months and Kodak is not positioned to compete aggressively.
- Can generate free cash flow of at least 70-80 cents a a share in the recession.
- The company has $4.06 a share in cash, no debt, and has free cash flow yield net of cash of 9%. The stock trades at a 40% discount to the average EV/EBITDA multiple of the e-commerce group.
SFLY today is up $1.16, or 9.2%, to $13.76.