Thursday Morning’s Market Insights: GoPro Inc (GPRO), Ambarella Inc (AMBA), NVIDIA Corporation (NVDA) Starbucks Corporation (SBUX)
GoPro Inc (NASDAQ:GPRO) is down more than 25% in pre-market trading to $10.95 after the action camera company cut sales estimates and announced it will be letting go of 7% of its workforce. To add insult to injury, Johnson & Weaver law firm announced it is investigating the company for securities fraud. Yesterday evening, GoPro announced a revised Q4 revenue estimate of $435 million, well below the analyst estimate of $512 million. This new estimate marks a 31% year-over-year revenue decrease. The company attributes this disappointing forecast to slower than expected sales, inventory gluts, and a price cut for its new product. As a result, the company is cutting 7% of its workforce, an estimated 105 jobs. This morning, the company is under fire again amid allegations that it released misleading information to investors in its secondary public offering in November of 2014. Erinn Murphy of Piper Jaffray weighed in this morning, reiterating an Underweight rating for the camera company and slashing her price target from $15 down to $9. The analyst commented, “Sell-through rates were challenged throughout the quarter but particularly in the earlier part. We believe trends were toughest in November… We would anticipate the next few quarters to remain challenging as the company balances inventory clean up with the current run-rate of demand. We are sticking to our UW rating given the lack of near-term visibility.” As of this writing, 7 analysts on TipRanks are bullish on GPRO, 2 are bearish, and 4 remain on the sidelines. The average 12-month price target is $31.42, marking a 115% potential upside from where shares last closed.
Ambarella Inc (NASDAQ:AMBA) is falling more than 12% in pre-market trading down to $39.11 after GoPro slashed its earnings estimates and announced lay off plans. Ambarella is the primary chip supplier for GoPro’s cameras. Last month, Ambarella warned of weak future sales in the wearable camera market when it lowered its Q4 estimates. At the time, the company referred to this as “near-term headwinds.” According to TipRanks, 6 analysts are bullish on the semiconductor company while 4 remain on the sidelines. The average 12-month price target between these 10 analysts is $79.25, marking a 77% potential upside from where shares last closed.
(NASDAQ:NVDA) is down over 3% in pre-market trading to $28.34 after the semiconductor company was downgraded from Equal Weight to Underweight by Barclays analyst Blayne Curtis. The analyst lowered his price target from $25 down to $23, commenting that the stock is overvalued with overhyped fundamentals. Curtis has never been bullish on the company; only neutral and bearish. According to TipRanks, 5 analysts are bullish on Nvidia, one is bearish, and 6 remain neutral. The average 12-month price target between these 14 analysts is $31.15, marking a 6.46% upside from current levels.
Starbucks Corporation (NASDAQ:SBUX) is down 1.88% in pre-market trading to $56.78 after a reports of a series of explosions in Jakarta, one of which took place in a Starbucks. The attacks claimed the lives of two civilians and five gunmen, though details remain unclear. The attack took place in a busy shopping area, prompting Starbucks to close all its locations in Jakarta “until further notice” out of an abundance of caution as the company continues to monitor the situation. Ten analysts polled by TipRanks in the last 3 months are bullish on the coffee chain while 2 remain on the sidelines. The average 12-month price target between these 12 analysts is $66.91, marking a 15% potential upside from where shares last closed.