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On Tuesday, Benchmark analysts adjusted their financial outlook for Getty Images Holdings Inc. (NYSE: GETY), reducing the price target from $6.00 to $4.50 while reiterating a Buy rating on the stock. The company, currently trading at $2.03, has seen its shares decline over 54% in the past year. According to InvestingPro analysis, Getty Images maintains strong profitability with a 73% gross margin, despite recent market challenges. The revision follows Getty Images’ fourth-quarter revenue performance, which surpassed Benchmark’s projections by 1%. This increase was primarily driven by the ’Other’ revenue category, which includes data licensing revenue.
The company’s fourth-quarter success in the ’Other’ segment was somewhat dampened by weaker-than-anticipated revenues in the Creative and Editorial segments, which underperformed the analysts’ estimates by 3% and 4%, respectively. With trailing twelve-month revenue of $939.29 million and an EBITDA of $262.59 million, Getty Images demonstrates resilient operational performance. InvestingPro subscribers can access 8 additional key insights about Getty Images’ financial health and growth prospects. Consequently, Benchmark has lowered its 2025 revenue estimate for Getty Images by 3.0% (1.7% in constant currency) to slightly below the midpoint of the company’s guidance range of $918 million to $955 million. This adjustment accounts for approximately $12.5 million in foreign exchange headwinds expected in 2025.
Benchmark analysts have decreased their 2025 Creative revenue forecast by 3%, attributing this to foreign exchange pressures and macroeconomic challenges affecting the agency business. Editorial revenue projections for 2025 have also been trimmed by 1%, despite anticipating a year-over-year growth of 1.7% when excluding event-based revenue. This revision factors in additional foreign exchange challenges and a lower-than-expected growth trajectory for non-event-related income in the fourth quarter.
Despite these downward adjustments, Benchmark has raised its 2025 ’Other’ revenue estimate by 18% after the fourth quarter’s strong performance, suggesting the possibility of ongoing incremental data licensing deals. However, Getty Images does not foresee a ’heroic’ revenue contribution from this segment as it continues to balance the value of its intellectual property exclusivity.
The nature of data licensing deals, which allows for immediate revenue recognition with free cash flow contributions spread over several years, was highlighted by the analysts. In light of the reduced revenue forecasts, Benchmark has also cut its 2025 adjusted EBITDA estimate for Getty Images by 5%. This reflects the lower top-line flow-through and includes approximately $8 million in one-time SG&A expenses in anticipation of the company’s merger with Shutterstock (NYSE:SSTK).
In other recent news, Getty Images Holdings Inc. reported strong financial results for the fourth quarter of 2024, with revenue reaching $247.3 million, surpassing the forecast of $245.49 million. The company’s earnings per share (EPS) aligned with expectations at $0.0467. Getty Images saw a 9.5% year-over-year revenue increase, driven by significant growth in the Americas region and a 19% rise in editorial revenue. The company also reported an 11.7% increase in adjusted EBITDA for the quarter. Additionally, Getty Images has reduced its net leverage to below 4x for the first time in over a decade. The company is preparing for a potential merger with Shutterstock, as announced earlier this year. Analyst firms have not provided any upgrades or downgrades in the recent reports. These developments indicate a period of financial stability and strategic growth for Getty Images.
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