Piper Jaffray analyst Erinn Murphy gives her two cents on GoPro Inc (NASDAQ:GPRO) and FitBit Inc (NYSE:FIT), after conducting a proprietary consumer technology survey with the intent to better view the consumer appetite for GoPro and Fitbit into the 2H.
Murphy believes that GoPro, as a brand, resonates with consumers. According to her survey, 61% of current GoPro owners admit that they would likely buy more GoPro products. However, the analyst believes that price points are critical for the success of these new products. According to the analyst, “1) 25% of consumers would not buy a HERO5 at all; 2) 38% would consider purchasing a HERO5 at $299 or less (the HERO4 Silver/Black at $400/$500); and 3) while bundling the HERO5/Karma drone does increase the consumer’s appetite to purchase the product, 22% indicated they would not purchase the bundle and 31% indicated they would consider if priced under $600.”
In addition, Murphy believes that GoPro could be late to the market, as other drone competitors are already seeing price competition. The analyst notes, “As we assess the current state of the consumer drone market, we reviewed pricing of five drones across three brands.” Murphy cites that she has seen drone prices decreasing 18% year to date, pointing to high price competition as a culprit.
According to TipRanks, the consensus price target for GPRO is $12.07, marking a 9.63% upside from current prices. Only 29% of analysts issue a Buy rating for GPRO, while 57% issue a Hold rating, and 14% maintain a Sell rating for the stock.
Weighing into the analyst’s stance on FitBit are certain statistics relating to the company and its consumers. For example, the analyst explains that 58% of individuals now own a fitness tracking device. The fact that over half of the population see a need to track their fitness progress points to a healthy market, and indeed, 79% of those who said they own a fitness tracking device said they own a Fitbit.
For the owners of Fitbit devices, frequency of use remains relatively unchanged. In addition, 62% of both males and females indicated that they would not buy a Fitbit this holiday season.
With weak intent to buy the company’s product, the analyst seems to be pinned in a neutral position. According to the analyst, “Our estimates for Q3 and Q4 remain below the Street, for both sales and earnings. While we are pleased the engagement metrics are encouraging for FIT, we are concerned that the incremental demand may be lackluster in a year with significant expansion of linear footage.” The analyst is playing a “wait and see” card until further notice.
Murphy maintains a Neutral rating on the company with a $16 price target.
TipRanks shows that 65% of analysts believe FIT is a Buy, while 45% issue a Hold rating for the stock. The consensus target price for FIT is $21.09, marking a 64.00% increase from current levels.
According to TipRanks, Erinn Murphy is ranked #3,806 of 4,057 analysts. She maintains a success rate of 45% and sees an average return of -5.3%. When rating GPRO, the analyst sustains a 39% success rate and an average profit of -10.7%. When rating FIT, the analyst has a 0% success rate and realizes an average profit of -57.7%.