Shutterstock (SSTK) Stock Forecast & Price Target

Shutterstock Inc. has demonstrated significant growth in its subscription revenue, which rose 31% year-over-year to $109.9 million, despite a decrease in the total annual revenue per user (ARPU) to $244, reflecting broader market dynamics. The company's content revenue saw a notable increase of 17% year-over-year, reaching $202.9 million, largely attributed to the strategic acquisition of Envato, which is expected to contribute approximately $50 million in quarterly inorganic revenue starting in the first quarter of 2025. Additionally, the dramatic increase in paid downloads, up 245% year-over-year to 120.9 million, underscores strong customer demand for Shutterstock's digital offerings, providing a solid foundation for continued growth.

Shutterstock's organic content revenue has been declining due to weak top-of-funnel demand and challenges in acquiring new customers, highlighted by a year-over-year decrease of approximately $3 million in sales and marketing expenditures. Furthermore, the company's adjusted EBITDA of $63.4 million, representing a margin of 26.1%, fell 5% short of consensus expectations, indicating operational underperformance. Additionally, revenue from the Data, Distribution, and Services segment also declined by 1.9% year-over-year, further reflecting the company's struggles in maintaining revenue growth across its offerings.