Piper Jaffray analyst Erinn Murphy was out today with a few insights on action camera maker GoPro Inc (NASDAQ:GPRO) and fitness devices maker Fitbit Inc (NYSE:FIT), following the latest semi-annual teen survey from Piper Jaffray. Let’s take a closer look.
Murphy maintained her cautious stance on GoPro shares, as Spring 2016 Taking Stock With Teens survey results pointed to softness in GoPro’s category, consistent with a multi-year downtrend. The analyst rates GPRO an Underweight with a price target of $7, which implies a downside of 49% from current levels.
Murphy wrote, “While GoPro has gained share in a declining category, we note overall camcorder ownership declined to 28% among teens versus 31% last Spring. To put this into perspective, camcorder ownership was north of 40% in 2013. While family ownership of GoPro was up to 21% of households (vs. 18% LY), we believe GoPro’s position in a declining category and an already material household penetration leaves little upside. Lastly, teens citing GoPro on “wish lists” ticked down to 0.9% versus 1.6% last spring. While there is new product coming this year (consumer drones in 1H and a new HERO 5 in 2H) it may be tough to re-stimulate demand given the recent air pocket of innovation.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Erinn Murphy has a yearly average return of -11.3% and a 35% success rate. Murphy has a -22% average return when recommending GPRO, and is ranked #3755 out of 3879 analysts.
Out of the 12 analysts polled by TipRanks (in the past 3 months), 3 rate GoPro stock a Buy, 7 rate the stock a Hold and 2 recommend a Sell. With a downside potential of nearly 15%, the stock’s consensus target price stands at $11.75.
Murphy took the other route, emphasizing a near-term (1-2 months) positive bias on Fitbit shares and raising her Q1 estimates, following the Taking Stock With Teens survey results. The analyst rates FIT shares a Neutral, with a price target of $16, which represents a slight downside potential from current levels.
Murphy explained, “We note Q1 sell-in has been strong with units of 1M Alta & 1M Blaze already sold in and our survey results suggest that ownership & appetite for the category and the brand are accelerating among teens. Overall intent to purchase a fitness tracker moved up from 15% last spring to 22%. Moreover, overall upper-income ownership rose to 22% for females and 18% for males (vs. 14% and 12% Fall 2015). Furthermore, Fitbit was the No.1 preferred fitness tracker with 72% mindshare (up from 53% last Fall). We maintain our Neutral rating on shares of FIT as we still need to see more consistent evidence of sell-through of the newer products.”
Out of the 18 analysts polled by TipRanks (in the last 3 months), 11 are bullish on Fitbit stock, while 7 are neutral. With a return potential of 48.50%, the stock’s consensus target price stands at $24.25.