GoPro after the bell tonight

GoPro is set to announce the results of its holiday quarter after the bell tonight, thursday 5th, 2015. What can we expect from the action-camera maker this time?

GoPro peaked at $98,47 in September last year and have been falling since the correction. Just like Twitter. The stock is down 46,6% and about 14 million shares were shorted as of Jan 15.

Citi has cut its GoPro target to $59 from $94. The stock is trading at $52,56 right now. Shorters have flocked to the equity with about 29% of GoPro`s float sold short. Also two-thirds of covering analysts rate the stock a «hold» or worse. 12-month price target consensus is $79. That`s 54,1% premium to current trading levels.

gopro-hero4-black

GoPro equities is down, recently hit by Apple`s new action-camera patent. Despite the negative cuts and short interests right now, the success of GoPro`s hardware business remains robust.

Last quarter GoPro came in with an earnings per share of $0,69. A growth of about 55%. Consensus from the Wall Street for earnings and revenue is $0,70 per share and $580,3 million. The stock jumped 13% last time when they released a stong guidance for fourth quarter sales of $550 to $580 million.

I wrote about GoPro before their IPO last summer, and when they went public they said that GoPro is a «media» company. What? A media company? Yes, they said so, but I don`t think they are there yet. They do not have any income from that segment, but I am exited about their new report. I will look for some news on this case.

No doubt that YouTube will help the user engagement. So will partnership with NHL, a GoPro channel on Virgin America in-flight entertainment, and channels like LG smart TV`s and Xbox platform. All of they will contribute.

GoPro is developing new consumer drones and this is probably here their R&D is spent? They have doubled their R&D to $42,4 million. The drone market is growing and sales in this market is expected to double to $11,5 billion in the next decade, and that can boost the GoPro shares.

GoPro shouldn`t be afraid of Apple right now. Apple want to reach out to the mainstream market with they products, and those action-camera`s is not there now. Nor GoPro is there right now. Maybe those action-camera`s will never be a mainstream product?

I think the reason for that is many, but price can be one of them. Spending thousands on this action-camera is probably not something for the average consumer and so far it seems like this is mainly something for the pro athletes and other extreme-sports enthusiasts.

One of the most shorted stocks will reports earnings after the bell tonight. Any surprise tonight?

 


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Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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