Analysts are weighing in on the action camera giant GoPro Inc (NASDAQ:GPRO) and semiconductor giant NXP Semiconductors NV (NASDAQ:NXPI), as shares of both companies fell sharply today on the heels of disappointing quarterly results.
Wedbush analyst Michael Pachter came out today with his views on GoPro, after the maker of action cameras reported profit and sales that trailed consensus estimates amid growing concern that it’s a single-product company. The analyst reiterated an Outperform rating on the stock, while slashing the price target to $33 (from $50), which implies an upside of 29% from current levels.
Pachter wrote, “We are decreasing our FY:15 estimates for revenue to $1,733 million from $1,938 million, and for EPS to $1.28 from $2.00 to reflect worse-than-expected Q3 results and Q4 guidance. We are decreasing our FY:16 estimates for revenue to $1,91 5 million from $2,320 million, and for EPS to $1.65 from $2.30 to reflect an unclear long-term product roadmap and our lower confidence in the consumer reception for GoPro’s new products given the early struggles of the HERO4 Session.”
“Management has made a number of missteps in recent months, most notably by not disclosing earlier in the year the lack of a full product refresh by yearend, as well as a poorly executed launch for the HERO4 Session. With that said, we believe that the recent bad news has now been fully priced into the stock, and positive news about holiday channel checks or the upcoming launches of the quadcopter and the virtual reality rig has the potential to reinvigorate shares,” the analyst continued.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Michael Pachter has a total average return of -1.8% and a 45.1% success rate. Pachter has a -43.6% average return when recommending GPRO, and is ranked #3295 out of 3808 analysts.
Out of the 16 analysts polled by TipRanks in the last 3 months, 10 rate GoPro stock a Buy, 5 rate the stock a Hold and 1 recommend a Sell. With a return potential of 92%, the stock’s consensus target price stands at $45.46.
NXP Semiconductors NV
In a research report released today, Canaccord analyst Matt Ramsay reiterated a Buy rating on shares of NXP Semiconductors, with a price target of $130, after the company released its third-quarter results, posting revenues of $1.522 billion, which were below the lower end of the company’s guidance. Moreover, the company noted a weakening in demand due to the uncertain economic environment. As a result, NXP’s guidance for the fourth quarter reflects a much more cautious view of near term sales.
NXP Semiconductors shares reacted to the earnings announcement, dropping nearly 19% to $73.31 on heavy volume, making it among the top losers today.
Ramsay noted, “Amidst a weaker macro environment, NXP reported solid Q3/15 results with revenue just below, but EPS above our estimates and consensus. However, citing a weakening macro environment, conservative channel inventory management, and also excluding the sale-pending HPRF business, Q4/15 guidance was well below our expectations across all divisions.”
The analyst concluded, “Overall, we continue to believe NXP is fundamentally the best positioned mixed-signal semiconductor firm, regardless of market cap. Incorporating the effects of the pending highly accretive Freescale merger, our thesis changes little. We believe the companies’ product portfolios are complementary, particularly in automotive and IoT, and should allow for considerable cost synergies, pushing operating margin toward 30% once fully integrated with considerable pro forma free cash flow feeding a resumed buyback program mid-2016. That said, for a company that has executed near flawlessly over the last couple years, this significantly underwhelming guide raises concern.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Matt Ramsay has a total average return of 0.5% and a 60.4% success rate. Ramsay has a 7.2% average return when recommending NXPI, and is ranked #2025 out of 3808 analysts.