Cigna earnings beat by $0.04, revenue topped estimates
On Tuesday, Citi analyst Ronald Josey revised the price target for Getty Images Holdings Inc. (NYSE: GETY) to $2.05, a decrease from the previous target of $2.45, while maintaining a Neutral rating on the stock. According to InvestingPro data, the stock currently trades at $2.01, with analyst targets ranging from $2.45 to $7.70, suggesting potential upside despite recent challenges. The adjustment follows Getty Images’ first-quarter financial results for the year 2025, which presented a mixed performance. The company’s revenue fell short of Citi’s expectations by 5%, although its EBITDA surpassed projections by 2%. InvestingPro data shows the company generated $941.09M in revenue and $252.84M in EBITDA over the last twelve months, maintaining a healthy gross margin of 73.11%.
The shortfall in revenue was attributed to several factors, including the Los Angeles Fires, ongoing strikes in Hollywood, a 9% year-over-year decline in Agency revenue, and foreign exchange headwinds. Despite these challenges, Citi noted positive developments, such as a shift towards subscription-based revenue, which now represents 57% of Getty Images’ total revenue. InvestingPro has identified several key factors affecting the company’s performance, including expectations for net income growth this year. Subscribers can access 6 additional ProTips and comprehensive financial analysis through the Pro Research Report. This marks an increase of 180 basis points year-over-year. Additionally, 53% of the last twelve months’ active annual subscribers were new to Getty, with 28% coming from growth markets including Latin America, Asia-Pacific, and Europe, the Middle East, and Africa.
The company’s gross margins saw a slight year-over-year improvement of approximately 20 basis points, reaching 73.1% in the first quarter. However, Citi’s adjusted EBITDA margin projections are tempered by $8 million in incremental costs related to compliance with the Sarbanes-Oxley Act (SOX) in the context of the proposed merger with Shutterstock (NYSE:SSTK).
Josey’s commentary on Getty Images’ financial outcomes highlighted the positive trend of subscription revenue driven by corporate demand. However, he expressed a cautious stance, suggesting that the balance of potential risks and rewards for the stock remains even, leading to the decision to uphold the Neutral rating. The stock currently trades at 17.9x forward earnings and 8.37x EV/EBITDA, with InvestingPro’s Fair Value analysis suggesting the stock is fairly valued at current levels.
In other recent news, Getty Images Holdings Inc. reported its financial results for the first quarter of 2025, highlighting a slight revenue growth of 0.8% year-over-year, reaching $224.1 million. Subscription revenue increased by 5.4%, now making up 57.2% of total revenue, although the company fell short of its projected revenue target of $236.17 million. This shortfall may have contributed to mixed investor sentiment following the earnings release. The company is enhancing its AI capabilities, but adoption is still in its early stages. Additionally, Getty Images is involved in ongoing litigation with AI companies, which could impact its resources and investor confidence. The company is also working through regulatory reviews related to a proposed merger with Shutterstock, with expectations to finalize in the second half of 2025. Analyst firms like Citi and Benchmark have shown interest in Getty Images’ strategic shifts, including its focus on subscription growth and AI developments. Despite challenges, Getty Images continues to expand its subscriber base and strengthen its partnerships, such as those with major sports leagues and media outlets.
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