GoPro Inc. (NASDAQ:GPRO) dipped more than 14 percent in after-hours trading after the company reported weaker-than-expected results for the third quarter last Wednesday. Furthermore, the guidance for 4Q sales was discouraging at $500-550 million, well below consensus forecast of $675 million. Following the announcement, three analysts covering the stock weighed in.
Alex Gauna of JMP securities maintained an Outperform rating on the stock while lowering his price target from $105 to $90. As per Gauna, the disappointing results and guidance were priced in the share price decline and the stock now presents investors with an “exceptionally attractive” entry point. Gauna believes that GoPro is still on track, pointing to growing revenues at 23 percent year-over-year, while being uniquely positioned as the “number one brand channel on YouTube,” and being one among only four brands to achieve one billion views. Gauna is also optimistic regarding the innovations to be rolled out in 2016, including Virtual Reality, Quadcopters, cloud editing tools, a next-gen Hero flagship device and original content.
On the other hand, Erinn Murphy from Piper Jaffray downgraded GoPro to Underweight, her firm’s sell-rating equivalent, while also lowering her price target to $20 down from $25. According to the Fly, Murphy feels the stock is likely to move lower following the action camera maker’s weaker than expected Q3 results. She also feels higher inventory and a “severe reversal” of sales trends would keep buyers away from the stock in her opinion.
Lastly, Andrew Uerkwitz from Oppenheimer took a neutral stance on GoPro with a Market Perform rating in view of the large Q4 guidance miss. For Uerkwitz, the company is becoming a “show me” story in new verticals like quadcopters, VR and media platforms where competitors are stronger and it lacks the first-mover advantage. Uerkwitz’s Market Perform rating comes with a negative bias on GPRO’s core camera business and has not factored in any contribution from quadcopters in 2016.
Of all the 16 analysts polled by TipRanks who have recently rated GoPro’s stock, 10 have rated it as Buy, 5 have rated it as Hold, and 1 has assigned a Sell rating to the stock. The average consensus price target for the stock is $44.25, an upside of nearly 76% over current levels.