JMP Securities Revises Estimates on GoPro Inc (GPRO)

On June 23, JMP Securities analyst Alex Gauna weighed in on GoPro Inc (NASDAQ:GPRO) with revised estimates for the company following high demand of GoPro cameras both within the United States and around the world. The sell-side firm cited numerous driving factors for the company’s revised earnings and market penetration estimates. The firm sees uncapped growth potential for GoPro following signals of booming demand trends both domestically and abroad.

Generally speaking, GoPro shares have been on an upward course since last month. So far in June, GoPro stock has increased more than 6% while the NASDAQ has only increased 1.24%. During the same time period, the Dow Jones Index declined .79%. GoPro’s key supplier Ambarella Inc benefited GoPro when the semiconductor company recorded better-than-expected results for the first quarter of fiscal ’15 earlier this month. Ambarella’s earnings call subsequently resulted in GoPro’s stock spiking more than 2% on June 3, achieving a monthly high of $61.

GoPro has also been investing in software, media, sponsorship, virtual reality, and real-time live broadcast in an effort to expand its product portfolio. This past May, CEO Nick Woodman announced that GoPro would be developing their very own quadcopter. GoPro is expected to release this quadcopter by the first half of 2016, officially getting into the drone game. Woodman described, “the quad is in some ways the ultimate GoPro accessory”.

Gauna reiterated an Outperform rating on GoPro, explaining, “On the near-term demand front, checks across North America and Europe continue to point toward a healthy pace of off-season demand activity, balanced inventory levels, and an ongoing absence of any meaningful competition”. Guana pointed out that he expects to see rapid growth in this market in the years ahead. By 2020 the company is expected to make an ambitious entry into the virtual reality markets, “leading to the TAM increasing by billions of dollars”.

Guana has rated GoPro nine times since July 2014, earning a 63% success rate recommending the stock with a +4.1% average return per recommendation. Overall, Guana has a 58% success rate recommending stocks, earning an average of +11.3% per recommendation.

Out of 15 analysts polled by TipRanks, 10 analyts have Bullish sentiments for GoPro while 5 analysts remain neutral. The average 12-month price target for GoPro is $71.50, marking potential upside of approximately 26% from where the stock is currently trading. On average, the all-analyst consensus for GoPro is Moderate Buy.

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