Why Shutterfly Inc. Stock Is Flying Higher Today

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  )  climbed as much as 16% today on reports that the company is searching for a buyer.  

So what: Shutterfly, which makes photo albums and other photo-based products, is working with boutique investment bank Qatalyst Partners on a sale, according to Bloomberg. The report said talks were in early stages and may not necessarily lead to a sale. The company was considering private-equity firms, e-commerce businesses, and Web storage companies among the potential buyers.

Now what: Talk of a sale almost always lifts a stock. so it's no surprise to see Shutterfly shares jumping on the news, though a 16% bounce seems generous. The company has struggled lately, posting losses on the bottom line despite revenue growing 17% in its most recent quarter. Considering the recent losses, shares may be overvalued after today's spike as the stock sports a forward P/E of 154. Also, given the specific nature of the company's business, it may be difficult to fold into a larger enterprise. Stay tuned to see if there are any interested buyers. You can keep up to date on Shutterfly by adding the stock to your Watchlist here

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Jeremy Bowman

Fool since 2011. I write about consumer goods, the big picture, and whatever else piques my interest. Follow me on Twitter to see my latest articles, and for commentary on hot topics in retail and the broad market.

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Related Tickers

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SFLY $38.86 Down -0.47 -1.20%
Shutterfly, Inc. CAPS Rating: *