Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Shutterfly (NASDAQ:SFLY) were fading today, falling as much as 10% after an analyst downgrade. 

So what: The research firm Cowen & Co. lowered its rating on the photo-products website all the way from buy to sell based on poor sales growth. Analyst Kevin Kopelman pointed out that Shutterfly's top-line growth is no longer outgrowing overall e-commerce sales in the U.S., explaining, "Shutterfly grew organic consumer revenue by an estimated 15% in 2013, vs. 17% growth for overall U.S. e-commerce, the first time Shutterfly has not beaten e-commerce industry growth since the company was founded in 1999." He also lowered his price target to $39 from $57.

Now what: Kopelman said that the slowing growth is evidence of increased competition, pricing pressure, and an inability to adapt to mobile technology, where the company generates just 8% of its sales. Judging Shutterfly against a platform as diverse as e-commerce may not be the best way to assess the digital-image vendor, but even assessing it against itself, the company seems to be struggling. Shutterfly's 2013 net income was the lowest it's been in three years, and analysts are expecting a loss this year as the company spends on investments. Top-line growth doesn't seem a concern, but I'd question whether the company will ever deliver on the promise baked into its triple-digit P/E rating.

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Jeremy Bowman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.