WASHINGTON: GoPro Inc. (NASDAQ:GPRO) shares have faced the brunt of investor concerns for more than half of this year, falling more than 50% in the last three months. Several Wall Street analysts are wary of the action camera maker, primarily because of the underwhelming demand for its recently rolled out products, coupled with weakness in the overall market.
The prevalent downturn in the action camera space has also reflected in the company’s third quarter earnings. GoPro reported $400.34 million in total revenue, which grew by more than 43% as compared to the same quarter of the previous year.
This tally missed the consensus estimate of $433.5 million. GoPro CEO, Nicholas Woodman commented on the company’s quarterly results and highlighted the ill-received HERO 4 session as the main reason behind its lackluster performance.
The company launched its high-definition action camera, HERO 4 session, as the successor to the HERO 3 Silver which was released back in July, after which the company slashed its price by 50%. Furthermore,
GoPro’s leading supplier, Ambarella provided weaker than expected guidance for the coming quarter, based on the deteriorating demand in the action camera market. Paul Coster, analyst at JP Morgan has weighed in on GoPro, to reiterate an Outperform rating on the stock along with a reduced price target of $45 instead of its earlier target of $55.
The research firm expects GoPro to generate top-line growth of 15% on the back of a new and improved HERO Black and Silver product line, in 2016. On the other end, Robert Baird analysts have downgraded the stock from an Outperform to Neutral rating. It also revised its 12-month price target downwards from $36 to $18, citing headwinds in the wearable sports market. The stock is currently down by 1%, in the pre-market trade session today.
