In a research report released after market close, Piper Jaffray analyst Erinn Murphy offered some commentary on GoPro Inc (NASDAQ:GPRO), following the company’s second-quarter results, posting EPS of $0.35 compared to Murphy’s $0.26 estimate and sales of $420 million, compared to Murphy $396 million estimate. The analyst reiterated an Overweight rating on GoPro stock with a $68 price target.
Murphy noted, “In normal course, shares of GPRO are volatile following the market’s initial read on GPRO’s better-than-expected earnings. Q2 sales and earnings bested printed expectations. The analyst continued, “We view the 72% Y/Y Q2 sales growth as exemplary, fueled by new product and an 82% Y/Y inventory build exiting Q1. Q2 gross margins were strong at 46.4%– up 420 bps Y/Y, besting our estimate of 45.1%, which leads us to believe higher price point products are tracking well.”
“We expect management to issue Q3 guidance on the call. Inventory has built considerably exiting Q2–up 173% Y/Y and +34% sequentially. This leads us to believe there could be a solid Q3 guide as new products start to ship. The Street is currently modeled at $401M (up 43% Y/Y and down 4% sequentially). We believe the Street is conservative.”, the analyst added.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Erinn Murphy has a total average return of 5.4% and a 65.2% success rate. Murphy has a 18.1% average return when recommending GPRO, and is ranked #896 out of 3711 analysts.