As rapid digitization continues globally, the internet content and information industry—including companies that offer content creation or content distribution services—continues to grow quickly.

People spent considerable time on the internet last year, thanks to stay-at-home restrictions necessitated by the COVID-19 pandemic. This trend is expected to continue for the foreseeable future, in-part due to its convenience. The rapid spread of the COVID-19 Delta variant across several parts of the world should also foster increasing demand for internet content and information. The global digital content market is expected to grow at a 14% CAGR between 2021- 2025

So, we think it could be wise to bet now on fundamentally sound internet content and information stocks Shutterstock, Inc. (SSTK) and Perion Network Ltd. (PERI).

Shutterstock, Inc. (SSTK) 

SSTK is a content-based technology company that helps businesses worldwide license the photographs, vectors, illustrations, video, and music needed for their communications. The New York City company’s brand portfolio includes Shutterstock, Bigstock, Shutterstock Editorial, Offset, and PremiumBeat.

Following the launch of Shutterstock.AI last month, SSTK announced on July 29 that Shutterstock.AI is available on Amazon.com, Inc.’s (AMZN) Amazon Web Services (AWS) Data Exchange. This is expected to help SSTK expand its consumer base because the move could help tech start-ups and industry giants train computer vision models at scale and with precision.

SSTK’s revenue increased 19.3% year-over-year to $189.91 million for the second quarter, ended June 30, 2021. The company’s subscribers increased 43.9% year-over-year to 321,000. While its net income increased 55.1% year-over-year to $29.45 million, its EPS increased 49.1% from the same period last year to $0.79. Also, its adjusted EBITDA came in at $53.06 million, up 43.3% year-over-year.

Analysts expect SSTK’s revenue to be $750.24 million in its fiscal year 2021, representing a 12.5% year-over-year rise. The company’s EPS is expected to increase 17.6% year-over-year to $3.08 in the current year. It surpassed the Street’s EPS estimates in each of the trailing four quarters. Over the past nine months, the stock has gained 55% in price to close yesterday’s trading session at $106.32.

SSTK’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which indicates a Buy in our proprietary ratings system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

SSTK has an A grade for Quality, and a B grade for Sentiment. Within the Internet- Services industry, it is ranked #2 of 42 stocks. Click here to see the additional POWR Ratings for Growth, Value, Stability, and Momentum for SSTK.

Perion Network Ltd. (PERI)

Headquartered in Holon, Israel, PERI provides online advertising solutions and search monetization to brands and publishers. Its business solutions include Undertone, Codefuel, MakeMeReach, and Smilebox. In addition, it offers Wildfire, a content monetization platform.

Undertone, a PERI brand, announced the High Impact CTV Suite launch on July 27, 2021. Dan Aks, Undertone’s president, said, “Undertone recognizes the challenges brought on by the current disjointed video ad space and has invested time and resources to develop a full, all-encompassing multiscreen solution, which now proudly includes CTV.”

PERI’s total revenues increased 81.8% year-over-year to $109.68 million in the second quarter, which ended June 30, 2021. Its non-GAAP net income increased 536.2% year-over-year to $12.32 million, while its non-GAAP EPS came in at $0.33, representing a 371.4% year-over-year rise. Its  adjusted EBITDA increased 479.1% year-over-year to $14.27 million.

For its fiscal year 2021, PERI’s revenue and EPS are expected to grow 29.7% and 103.1%, respectively, year-over-year to $425.39 million and $0.65. In addition, it has surpassed the consensus EPS estimates in each of the trailing four quarters. Over the past nine months, the stock has gained 157.3% to close yesterday’s trading session at $19.12.

PERI’s POWR ratings reflect this promising outlook. The stock has an overall B rating, which equates to a Buy in our proprietary rating system.

In addition, it has an A grade for Growth, Value, and Sentiment. PERI is ranked #4 in the same industry. Click here to see the additional POWR Ratings for PERI (Momentum, Quality, and Stability).

SSTK shares were trading at $109.42 per share on Tuesday morning, up $3.10 (+2.92%). Year-to-date, SSTK has gained 53.33%, versus a 20.66% rise in the benchmark S&P 500 index during the same period.

About the Author: Manisha Chatterjee

Since she was young, Manisha has had a strong interest in the stock market. She majored in Economics in college and has a passion for writing, which has led to her career as a research analyst. More...

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