Shares of action camera company GoPro Inc (NASDAQ:GPRO) closed yesterday at $29.86, very close to its 52-week low of $29.62. The stock has fallen 55% year-to-date.

Pacific Crest analyst Brad Erickson weighed in on GoPro yesterday, maintaining a Sector-Weight rating in the stock and reducing his EPS estimates for FY15 to $1.73 from $1.86 and for FY16 to $2.04 from $2.17. The analyst reasoned his reduced estimates on GoPro to a small product refresh for the holiday season and management’s recent commentary on poor demand for the HERO4 Session, the company’s waterproof camera.

As per Erickson, the recent channel checks in the US are an indication of a nearly 20% decline in m/m sell-through and also a drop in inventory days due to a visible slowdown in shipments.

In his report, Erickson noted, “What surprised us most about management’s recent commentary about weak Session demand is not that the product is not selling well, but that the company seems to have made Session a more prominent part of the portfolio for this year than our prior expectations.”

He concluded by saying, “While we still expect y/y growth next year, driven by new products, further investor suspicion of market saturation continues to pose downside risk from current levels, which keeps us sidelined on the name.”

Brad Erickson currently has an overall success rate of 52% recommending stocks and a -5.1% average loss per recommendation when measured over a one-year horizon and no benchmark.

Rob Cihra of Sterne Agee also weighed in on GoPro yesterday, initiating a Buy rating on the stock with a $45 price target.

Cihra is optimistic about GoPro’s unique positioning in the market, noting “History is littered with one-function products/ companies that ultimately just get consumed into smartphones (e.g., digital cameras, mp3 players, Palm, Flip), and the iPhone 6s and Galaxy S6 now shoot 4K video, but we see GPRO’s unique defense being it’s expressly designed for situations/environments where users wouldn’t want to risk wrecking their phone.”

Given the disappointing performance of HERO4 Session, Cihra sees growth slowing down in 2H15. He said, “With a tough comp off last year’s 4Q14, we estimate 4Q15 revenue just +4%Y/Y and our FY15 EPS is below consensus.”
He’s optimistic about FY16 given that the company is set to launch new products like HERO5 and its first quad-copter drone. He’s expecting sales of cameras to grow by 18% year-on-year to 8.7 million units and revenue to grow 24% year-on-year to $2.3B.

Rob Cihra currently has a 60% success rate recommending stocks and a +14.1% average return per recommendation when measured over a one-year horizon and no benchmark.



Out of 17 analysts polled by TipRanks who have rated GoPro within the past three months, 13 analysts are bullish on the stock while the remaining four are on the sidelines. The average 12-month price target on GoPro is $69.36, marking a 129.44% potential upside from where shares last closed.