Getty Images stock price analysis and earnings preview

Getty Images (NYSE: GETY) stock price has been a major underperformer this year as concerns about its business have risen. The stock was trading at $4.41 on Friday, a few points above its record low. A few months ago, Trillium Capital proposed taking it private at $10 per share.

Getty earnings ahead

Getty Images is a leading company that provides solutions to businesses, mostly in the media, publishing, and design sectors. It owns the eponymous Getty Images brand together with Unsplash and iStock. Most of its customers are corporate followed by media, and agency.

Getty Images is a slow-growing quality business that experiences low churn in its operations. In the most recent quarter, the company’s customers jumped by just 4,000 to over 829,000. The management cited the ongoing macro headwinds, especially in Europe.

Total revenue rose by just 2% to $235 million as its annual subscription revenue jumped by 50.7% in Q1. Creative revenue dropped by 1.3% to $146.5 million, helped by its iStock business growth. Editorial revenue jumped by 7.5% to $84.6 million.

The next key catalyst for Getty stock price will be the company’s earnings scheduled for Monday. Analysts expect that its revenue will be $236.2 million while its earnings per share will be 4 cents. In its Q1 earnings call, the management guided to a 1% to 4% revenue growth to between $936M and $963M.

In all, I believe that Getty Images is a good value company that has potential for becoming profitable in the coming years. For one, its business is growing albeit at a slower pace and in light with the rising competition.

At the same time, the company has a strong subscription business that experienced low churn in light of the rising competition. Some of its top competitors are companies like DepositPhotos and Shutterstock (SSTK). Still, I prefer investing in Shutterstock, which has constantly maintained profitability.

Getty Images stock price forecast

The daily chart shows that the GETY stock price has entered a deep slumber mode lately. It has remained slightly below $5 since June. As a result, the Average True Range (ATR) has dropped to the lowest level this year, signaling that volatility has dried down.

The stock has remained slightly below the 25-day and 50-day moving averages. Therefore, the outlook before earnings is neutral with a bearish bias. A break below the support at $4.65 will see it drop to the next support at $4.0. The alternative scenario is where the shares recovers and moves above $5.0.