When you look at NYSE:SSTK, it's hard to ignore the strong fundamentals, especially considering its likely undervaluation.

Our stock screening tool has identified SHUTTERSTOCK INC (NYSE:SSTK) as an undervalued gem with strong fundamentals. NYSE:SSTK boasts decent financial health and profitability while maintaining an attractive price point. We'll break it down further.

Valuation Insights: NYSE:SSTK

ChartMill assigns a Valuation Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing different valuation elements, such as price to earnings and free cash flow, both in absolute terms and relative to the market and industry. In the case of NYSE:SSTK, the assigned 8 reflects its valuation:

• SSTK is valuated reasonably with a Price/Earnings ratio of 10.34.
• Compared to the rest of the industry, the Price/Earnings ratio of SSTK indicates a rather cheap valuation: SSTK is cheaper than 93.85% of the companies listed in the same industry.
• When comparing the Price/Earnings ratio of SSTK to the average of the S&P500 Index (25.74), we can say SSTK is valued rather cheaply.
• With a Price/Forward Earnings ratio of 10.49, the valuation of SSTK can be described as very reasonable.
• Compared to the rest of the industry, the Price/Forward Earnings ratio of SSTK indicates a rather cheap valuation: SSTK is cheaper than 84.62% of the companies listed in the same industry.
• SSTK's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 21.31.
• SSTK's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. SSTK is cheaper than 80.00% of the companies in the same industry.
• 86.15% of the companies in the same industry are more expensive than SSTK, based on the Price/Free Cash Flow ratio.
• The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
• SSTK has an outstanding profitability rating, which may justify a higher PE ratio.

How do we evaluate the Profitability for NYSE:SSTK?

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NYSE:SSTK was assigned a score of 8 for profitability:

• SSTK has a Return On Assets of 11.64%. This is amongst the best in the industry. SSTK outperforms 87.69% of its industry peers.
• With an excellent Return On Equity value of 22.22%, SSTK belongs to the best of the industry, outperforming 92.31% of the companies in the same industry.
• Looking at the Return On Invested Capital, with a value of 12.76%, SSTK belongs to the top of the industry, outperforming 87.69% of the companies in the same industry.
• The Average Return On Invested Capital over the past 3 years for SSTK is significantly above the industry average of 10.39%.
• The 3 year average ROIC (16.97%) for SSTK is well above the current ROIC(12.76%). The reason for the recent decline needs to be investigated.
• With a decent Profit Margin value of 13.51%, SSTK is doing good in the industry, outperforming 80.00% of the companies in the same industry.
• In the last couple of years the Profit Margin of SSTK has grown nicely.
• The Operating Margin of SSTK (10.58%) is better than 75.38% of its industry peers.
• SSTK's Operating Margin has improved in the last couple of years.

Assessing Health for NYSE:SSTK

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:SSTK has received a 6 out of 10:

• An Altman-Z score of 3.60 indicates that SSTK is not in any danger for bankruptcy at the moment.
• SSTK has a Altman-Z score of 3.60. This is in the better half of the industry: SSTK outperforms 73.85% of its industry peers.
• SSTK has a debt to FCF ratio of 0.25. This is a very positive value and a sign of high solvency as it would only need 0.25 years to pay back of all of its debts.
• SSTK has a Debt to FCF ratio of 0.25. This is amongst the best in the industry. SSTK outperforms 84.62% of its industry peers.
• SSTK has a Debt/Equity ratio of 0.06. This is a healthy value indicating a solid balance between debt and equity.
• SSTK does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

Understanding NYSE:SSTK's Growth

ChartMill assigns a proprietary Growth Rating to each stock. The score is computed by evaluating various growth aspects, like EPS and revenue growth. We take into account the history as well as the estimated future numbers. NYSE:SSTK was assigned a score of 6 for growth:

• SSTK shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 29.72%, which is quite impressive.
• Measured over the past years, SSTK shows a very strong growth in Earnings Per Share. The EPS has been growing by 27.31% on average per year.
• The Revenue has been growing by 8.24% on average over the past years. This is quite good.
• SSTK is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 13.71% yearly.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

For an up to date full fundamental analysis you can check the fundamental report of SSTK

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.