Piper Jaffray: Favorable Risk/Reward Heading Into GoPro Inc (GPRO) Earnings

In a research report issued today, Piper Jaffray analyst Erinn Murphy reiterated an Overweight rating on GoPro Inc (NASDAQ:GPRO) with a price target of $68, which represents a potential upside of 25% from where the stock is currently trading. The report comes ahead of the company’s second-quarter earnings results, which will be reported after the market close on Tuesday, July 21.

In her report, Murphy wrote, “As we approach GPRO’s Q2 report, we believe the current risk/reward on shares is favorable and expect another “beat & raise”. Shares have pulled back recently in reaction to two factors: 1) IPO of FIT which we believe has created some money rotation; and 2) a recent competitor initiation at a Neutral citing decelerating growth. That said, we do not believe the GPRO growth thesis has changed.”

The analyst added, “We remain confident GPRO will be able to exceed expectations heading into next week’s Q2 print. Our confidence is based on two recent findings: 1) our proprietary Amazon Relative Strength Index (published 6-1-2015) supporting strong momentum across both legacy and new product has strengthened over the past months; and 2) Ambarella Inc (NASDAQ:AMBA) reported results beating expectations which suggests to us that Q2’s sales could be in the $440-$450M range (vs. our $396M estimate).”

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 4.5% and a 62.1% success rate. Murphy has a 7.2% average return when recommending GPRO, and is ranked #1053 out of 3707 analysts.

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