Getty Images stock price has crashed to a record low as concerns about its growth and AI disruption continue. GETY slumped to a low of $2 on Friday, down by over 94% from its highest level in 2022. So, what next for Getty shares ahead of its quarterly earnings on Monday?
Getty Images business is slowing
Getty Images is one of the most popular players in the stock image and video industry. It is widely used by companies in the media industry like CNN, BBC, New York Times, and The Guardian. Other clients are companies in the agency industry, including popular names like Dentsu and WPP.
Getty Images business has slowed in the past few years as the royalty-free image business has become more competitive. Some of the top competitors in the industry are Shutterstock, Adobe Stock, Depositphotos, Pixabay, and Pixabay. Most of these firms are popular because of their relatively lower subscription costs.
Getty Images’ annual revenue slipped from a peak of $926 million in 2022 to $916 million last year. To solve this problem, the company announced that it would merge with Shutterstock, a move that will create a bigger company and lead to between $150M and $200M cost synergies.
GETY earnings ahead
The next important catalyst for the Getty Images stock price will be the upcoming earnings, providing more color on its performance.
Data compiled by Yahoo Finance shows that the average revenue estimate by the three analysts tracking the company is that its revenue will be $246 million, up by 9% from the same quarter a year earlier.
If accurate, the annual revenue will come in at $937 million, a 2% increase from a year earlier. The company’s annual revenue will be $958 million this year, excluding the Shutterstock deal.
Getty Images earnings per share (EPS) is expected to be $0.06, up from $0.03 in the same period in 2023. The challenge, however, is that Getty has a long track record of missing analyst estimates. It has missed the earnings estimate in the last three consecutive quarters.
The most recent results showed that Getty Images made $240.5 million in the third quarter, a 4.9% increase from Q3’23. This revenue led to a loss of $2.5 million and adjusted EBITDA of $80.6 million.
Getty Images valuation
Getty Images has a market cap of over $838 million, much lower than its all-time high of over $10 billion. This means that its long-term shareholders have shed over $9 billion in assets.
Getty Images has a forward price-to-earnings ratio of 12.45, lower than the S&P 500 index average of 21. This valuation divergence is because its slow growth and the general view that AI image generators will disrupt its business.
Still, there are signs that the company has become highly undervalued considering that its business is still growing, albeit at a slower pace. As such, for the stock to rebound, it will need to demonstrate that its business is still growing.
Getty Images stock price analysis
GETY chart by TradingView
The weekly chart shows that the GETY share price has remained in a tight range in the past few years. It has constantly remained below the key resistance level at $5. Most recently, it formed a descending triangle pattern and moved below it.
It has remained below the 50-week and 100-week moving averages, a sign that bears are in control. Therefore. The stock will likely remain in a tight range in the coming days as it publishes its results. A strong rebound cannot be ruled out. If this happens, it will likely rise and retest the resistance point at $.
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