What to Expect Ahead of GoPro Inc’s Second Quarter Earnings: Wedbush

Wedbush analyst Michael Pachter weighed in today with his prediction on GoPro Inc (NASDAQ:GPRO), as the company will report second-quarter results after the market close on Tuesday, July 21, and host a conference call at 2:00pm PT. Murphy expects Q2 upside driven primarily by continued strong demand for the HERO4 devices. She also expects another conservative approach to quarterly guidance. However, she expects initial Q3:15 guidance that exceeds the Street’s expectations.

Pachter wrote, “We expect revenue of $410 million and EPS of $0.28, compared with consensus estimates of $395 million and $0.26, and guidance of $380 – 400 million and $0.24 – 0.26. Based upon our informal Q2 channel checks (primarily on Amazon), GoPro’s suite of capture devices continues to perform very well, with the HERO4 Black ($499.99) and HERO4 Silver ($399.99) consistently among the top three best sellers in the action camera space.”

The analyst continued, “In Q4:14 and Q1:15, GoPro delivered top-line upside relative to the high-end of guidance of $54 million and $23 million, with rolling six-month growth of 65% and 67%, respectively. As a result, guidance for a rolling six-month growth range of 55 – 59% for Q2 is probably too light, particularly with the HERO+ LCD launching in June.”

Furthermore, “The current consensus estimates are for revenue of $399 million (roughly in-line with the high end of Q2 guidance) and EPS of $0.22 (down sequentially). The HERO+ LCD, HERO4 Session, and a new batch of accessories should drive additional sequential growth. If Q2 revenue comes in at the high-end of the guidance range, a sequentially flat Q3 results in rolling six-month growth of only 53%, while a $440 million figure means only 60% rolling six-month growth, still below recent quarters.”

The analyst reiterated an Overweight rating on GoPro Inc stock with a price target of $68, which implies an upside of 24.8% from current levels. 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 0.3% and a 48.2% success rate. Pachter has a -8.9% average return when recommending GPRO, and is ranked #2191 out of 3707 analysts.


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