GoPro Inc (GPRO): The Next 12 Months Will Continue To Challenge


Oppenheimer analyst Andrew Uerkwitz sees GoPro Inc (NASDAQ:GPRO) in the center of a period of flux, and subsequently, the upheaval presents its own set of challenges. As such, the analyst reiterates a Perform rating on GPRO without listing a price target.

This time last year, the analyst detailed in a note of “Constructive Criticism” a series of steps the action camera giant would need to take in 2016 to “move past a tough 2015.” How has GPRO fared? The analyst’s verdict: “Not quite yet to break-even.”

Uerkwitz highlights, “In the past year, we saw GoPro develop a clear strategy (end-to-end capture solution), new software (a quick editing and sharing app), and new verticals (drone and handheld gimbal). Unfortunately, transition years can also be tough—three quarters of inventory clearing, Karma recall, and restructuring can attest to that. So now with a smaller staff, a break-even target, and Karma relaunch, GoPro needs perfect execution more than ever, we think. We introduce 2017 estimates and believe 1H will be strong, 2H could be light, and remain skeptical of the drone.”

Overall, “GoPro has made difficult decisions over the past 24 months, and we believe the next 12 will continue to be challenging. But from what we saw in 2016, the company is mostly heading in the right direction. We model a conservative 2017 (better 1H, flat 2H) and maintain our Perform rating,” Uerkwitz concludes.

As usual, we like to include the analyst’s track record when reporting on new analyst notes to give a perspective on the effect it has on stock performance. According to TipRanks, four-star analyst Andrew Uerkwitz is ranked #650 out of 4,350 analysts. Uerkwitz has a 53% success rate and realizes 6.1% in his yearly returns. When recommending GPRO, Uerkwitz yields 8.4% in average profits on the stock.

TipRanks analytics demonstrate GPRO as a Hold. Based on 16 analysts polled by TipRanks in the last 3 months, 1 rates a Buy on GPRO stock, 10 maintain a Hold, while 5 issue a Sell. The 12-month average price target stands at $9.22, marking a 1% downside from where the stock is currently trading.

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