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Shutterfly Set for Massive Holiday Sales

The picture below is just some of the stuff that has shipped to my house in the past month:

There are also a few more books along the way, along with another calendar.

When it comes to consumer goods, our household is by no means an early adopter, But the software on the site is like a Pinterest you eventually pay for.

I wouldn't be suprised if SFLY had an unexpected sales jump this quarter.

My Contact With Shutterfly

The Wife is the only true connection with Shutterfly. I haven't really been on the site much but she is on it all the time.

Other than facebook, the Shutterfly site is the only single website that The Wife will stay on consistently and for long durations.

The Wife has already spent way too much on these things, and she has been recommending it to all of her friends-- many have come back to her to say that they are "hooked" and have ordered a bunch of crap for their family this Christmas.

The Wife's students have also said they've already ordered calendars for their parents because they didn't know what else to get them for Christmas.

We also received a "free calendar" coupon from our local Target, so they must have recently signed a distribution or referral deal with the retail chain.

Anecdotally things are shaping up well for this company.

Some Fuzzy Math

The chart below is a Google Trend of the term "shutterfly"


Note how there has been decent growth over the past few holiday seasons, but this year was an exceptional jump for some reason.

Fundamentally, the company looks decent. No debt and decent revenue growth.

In fact, we could look at the google trends and extrapolate potential revenue for the quarter.

Here is the revenue chart from YCharts:

SFLY Revenue Quarterly Chart

A very crude analysis puts the revenues into the 400s:

Now that is a bit ambitious because we aren't considering traffic saturation and other things.

But the current consensus on Wall Street is for revenue around 307MM, which seems to be a bit low given the attention it has this year.

The Market Structure

Technically, the chart needs work. There are signs of accumulation but if it loses the support from May then it's most likely lost all investor confidence and the downtrend will continue.

A proper trend change would require a move above 35, which is a ways off. But if it can do that, coupled with the 35% short interest, it may see some momentum back into the 50s.

 

by Steven Place

Steven Place is the founder and head trader at investingwithoptions.com/