VistaPrint shares drop after fiscal 3Q report

Shares of Bermuda-based fell $4.25, or 11.2 percent, to $33.93. In the past year, the stock has traded between $27.34 and $48.60.

The online printing and graphic design services company said late Tuesday that its third-quarter profit grew as average daily order volume rose over 50 percent in the period, but its gross margin declined year-over-year to 61.3 percent from 65.1 percent.

VistaPrint also predicted fourth-quarter adjusted earnings of 27 cents to 31 cents per share, the top end of which matches the estimate of analysts polled by Thomson Financial.

Several analysts were unfazed by the report, with some increasing price targets for the stock.

Jefferies & Co. analyst Youssef Squali kept his "Buy" rating for the company and raised his target price to $46 from $43, calling the company's third-quarter results "robust."

The analyst said the shares were likely to fall on concerns about VistaPrint's gross margin, and he recommended buying the shares on a pullback.

Meanwhile, Cowen & Co. analyst Jim Friedland noted positive trends such as an ongoing drop in customer acquisition costs, a year-over-year improvement in VistaPrint's adjusted operating margin and a larger-than-expected drop in referral revenue as a percentage of overall revenue.

The analyst wrote in a client note that he continues to think VistaPrint "is a category killer in the small-business printing market."