Although we find the ongoing economic weakness and rising unemployment hurting the company's profitability, we believe margins will further expand in the coming quarters backed by technology leverage, lower material costs and labor efficiency. The holiday season is also likely to act as a key driver of the stock in its ongoing fourth quarter.
Moreover, recent acquisition of WMSG will likely enhance Shutterfly's presence in the commercial printing market. Hence, we maintain our Outperform rating on the stock.
SHUTTERFLY INC (SFLY): Free Stock Analysis Report
Zacks Investment Research
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