Piper Jaffray Sets Expectations on Fitbit Inc (FIT) and GoPro Inc (GPRO) Ahead of Earnings

Piper Jaffray analyst Erinn Murphy provides mixed ratings on fitness tracker Fitbit Inc (NYSE:FIT) and adrenaline sports camera maker GoPro Inc (NASDAQ:GPRO) ahead of earnings. While Fitbit is hoping its partnership with China’s T-Mall will increase sales, GoPro is looking to bounce back with its anticipated Quadcopter and Hero5 product launch.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, Murphy has a yearly average loss of 11% and a 36% success rate. Murphy is ranked #3789 out of 3911 analysts.

Fitbit Inc

Ahead of earnings in the week of May 2nd, Piper Jaffray’s Erinn Murphy remains neutral on Fitbit and reiterated a hold rating with a price target of $16.

According to Murphy, data points for Fitbit have been positive during Q1 2016 thanks to strong Amazon trends attributed to the newly launched Alta and Blaze models. Murphy remains on the sidelines for Fitbit as she estimates that 70% of earnings will come from the 2H of 2016, given tougher product launch comparisons in 2H 2016.

Following Piper Jaffray’s  31st semi-annual teen survey on the wearable category, the survey results were positive for Fitbit. According to Murphy, intent to purchase a fitness tracker moved up from 15% to 22%. Further, Fitbit was the number one fitness tracker with 72% of mindshare (an increase from 53% last Fall). Fitbit’s newly launched products Alta and Blaze experienced strong rankings. Alta was ranked number 11 over the trailing four weeks and Blaze was ranked number 26 in the top sellers list for Sports & Fitness.

Murphy concludes by highlighting Fitbit’s partnership with China’s T-Mall (owned by Alibaba). The Asia-Pacific region, according to Murphy, represents a major growth opportunity for Fitbit. 9% of total Fitbit sales come from the Asia Pacific region. Fitbit will be hosting a Fitbit Super Brand day on May 18 to cement themselves as a top 10 global brand in the electronics category with 400 million fans in Asia.

Out of the 18 analysts polled by TipRanks (in the past 3 months), 10 are Bullish on FireEye Inc stock, while 8 remain Neutral on the stock. With a potential upside of 28.36%, the stock’s consensus target price stands at $23.58.

GoPro Inc

In anticipation of earnings this week, Murphy of Piper Jaffray reiterated an Underweight rating on GoPro with a price target of $7.

Murphy is concerned that the expectations for GoPro’s new product, the Quadcopter, may be “over shot” and awaits to hear an update on timing for the product release. Pricing for consumer drones is already under pressure which could disrupt the success of the Quadcopter. Further, Murphy has concern that the company is two months shy of the end of 1H16 and no announcement has been finalized on the launch. According to Murphy, during the month of April, the HERO and the HERO + LCD models were discontinued in order to make room for the latest HERO5 platform.

Murphy is negative on the camera category and GoPro in general. Piper Jaffray’s recent teen survey showed that overall teen camera ownership declined to 28% from 31% last spring. While GoPro has increased its mindshare as the most preferred camera brand to 22% vs 15%, Murphy believes GoPro already holds a sizable portion of the market and will face increased difficulties expanding its share. Lastly, Piper Jaffray’s wish list analyst showed a decline in trends indicating a GoPro as a top holiday gift wish (0.8% vs. 1.6% last spring).

Out of the 11 analysts polled by TipRanks (in the past 3 months), 3 rate GoPro Inc stock a Buy, while 6 rate the stock a Hold and 2 rate the stock a Sell. With a potential downside of 4.25%, the stock’s consensus target price stands at $11.71.


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