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On Monday, Citi analysts resumed coverage of Getty Images Holdings Inc. (NYSE:GETY), issuing a Neutral rating with a price target of $2.45. The decision reflects a cautious stance towards the stock, which has seen a significant 40.65% decline over the past six months and currently trades at $2.19. According to InvestingPro analysis, the stock appears fairly valued based on its proprietary Fair Value model.
Getty Images, a global visual content creator and marketplace generating $939.29 million in revenue with an impressive 73.06% gross profit margin, has been grappling with declining agency revenues and broader economic pressures. These concerns are somewhat tempered by the potential benefits of Getty’s upcoming merger with Shutterstock (NYSE:SSTK), which is anticipated to be finalized in the second half of 2025. Citi analysts expect the merger to lead to a significant shift towards subscription models and to yield between $150 million and $200 million in annualized cost savings. These savings are projected to bolster Getty Images’ capacity for growth, innovation, and debt reduction. InvestingPro subscribers can access 7 additional key insights about Getty’s financial health and growth prospects.
The merger’s expected advantages also include a strategic mix-shift towards subscription revenue, which could positively impact Getty Images’ financial performance. Additionally, there may be an opportunity for margin improvement through the company’s GenAI-related data licensing deals. Should these deals materialize, they could provide a boost to Getty Images’ financial projections.
Citi’s analysis follows Getty Images’ fourth-quarter results and provides insight into the proposed merger with Shutterstock (SSTK). The analysts remain watchful of the company’s ongoing transition towards subscription-based revenue and the potential for increased margins from new data licensing agreements related to GenAI technology.
The price target set by Citi indicates the firm’s current valuation of Getty Images stock, taking into account the identified risks and opportunities. With the merger on the horizon, Getty Images is at a pivotal point that could reshape its market position and financial trajectory.
In other recent news, Getty Images Holdings Inc. reported strong financial results for the fourth quarter of 2024, with revenue reaching $247.3 million, slightly surpassing the forecast of $245.49 million. The company saw a 9.5% year-over-year increase in revenue, driven by a notable 19% rise in editorial revenue. Adjusted EBITDA for the quarter increased by 11.7%, reflecting solid profitability. Despite the positive earnings performance, Benchmark analysts revised their outlook for Getty Images, maintaining a Buy rating but lowering the price target from $6.00 to $4.50. This adjustment was made due to weaker-than-expected revenues in the Creative and Editorial segments, which underperformed by 3% and 4%, respectively. Benchmark also reduced its 2025 revenue estimate by 3% due to foreign exchange pressures and macroeconomic challenges. However, the ’Other’ revenue segment showed strength, leading to an 18% increase in its 2025 revenue estimate. Getty Images is also preparing for a potential merger with Shutterstock, which is expected to contribute to future financial performance.
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