Tag Archives: GoPro

Snap Inc is in free fall and can end up like Twitter without any usergrowth

The shares of Snap Inc was a success in the beginning of its IPO. Just like many other IPOs. But now, the story is different. Snap Incs stock has seen a big selloff for weeks now, and the price has fallen down to $13,65 after reaching a top of nearly $30 on high volume.

The market cap is $15,99 billion, which means the company has lost about $16 billion of market cap so far. To put that number in perspective: Twitter is worth about $12 billion. GoPro reached nearly $90, but now GoPro stocks is trading at about $10. Snap has lost about 10 GoPro companies. That`s a lot.

 

 

How can Snap survive in a market like it is today? Facebook is the biggest rival and they have more than 2 billion DAU`s while Snap has about 173 million. The question is why people should sign up to Snap when they know they have the same tools on Facebook?

This is what investors are looking for. How many DAU`s is it and are the number rising or declining? Quarterly revenues per user grew per user by 180% during Q1. People spend about 30 minutes vs 25 minutes it highlighted prior to its IPO.

Investors should know that there are a normal situation when an IPO stock is falling like Snap Inc. First of all, it is the lock-up expiration which means about 1,2 billion of Snap stocks will be available for sale in the near future.

Many Snap stocks are owned by VC`s and Executives, but it is a bad sign when insiders are selling their own stocks in their own company. On top of that you have short sellers. This is why Shares of Snap Inc fell about 23% in July. But not only that.

Profits are more important than users and users gives profits. Right now you shouldn`t mearsure the value of the company by users but by profit. If you do that, the stock will fall below $10 and end up similar to Twitter which is having the same problem; user growth.

Snap Inc was a bubble that burst with just 166 million DAUs compared to Instagrams 250 million. It`s funny to see that Snap is worth more than Twitter. How is that possible with only $150 million in revenue for the quarter?

Snap is also burning a lot of cash. They earn $150 million and spend more than $200 million.

Analysts are concerned about Snaps volatile growth and the fact that Snaps insiders would be able to unload some of their shares after a lock-up period expired at the end of July. Snap`s underwriter, Morgan Stanley, downgraded the shares from overweight to equal weight.

Snap Inc is expected to report earnings on Thursday, and investors need impressive results to be convinced about their marketing strategy in the future. A big surprise like that can also stop the negative sentiment at the moment.

Snap Inc will report earnings on 08/10/2017 after market close. Earnings forecast for the quarter is $-0,29 vs $-2,31 in May this year.

 

 

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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GoPro must rethink its VR strategy

GoPro was once a Wall Street favorite. Right after the IPO, the stock peaked at about $87 in October 2014. That was then. The stock has been falling since then and are now trading at about $12.

The stock has plummeted on weaker demand and an economic slowdown in China. Many analysts have lowered GoPro`s expectations for 2016 and 2017 EPS and revenue, as well as average selling price expectations.

 

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The competition in the market put a pressure on GoPro as both Sony and Xiaomi are launching similar products. The action camera space has become increasingly crowded and commoditized. The company`s target market has become saturated with cheaper and more innovative products, severely hurting its bottom line.

They will also meet challenges from Facebook on their VR ambitions. Facebook encourage everyone on the platform to make their own high-end 360-degree cameras, which means GoPro need to build a new strategy for their VR ambitions.

Investor need to know that GoPro is innovative enough to create a new VR capture device that can beat their competitors like Facebook.

GoPro President, Bates said last quarter that virtual reality is a «key initiative,» and that it had «several products in development that will position GoPro as a leader in VR.»

The competition between Surround 360 makers are tightening and GoPro can lose the high-end VR camera market to other new players and one of the cheaper rivals are Ricoh.

The $400 HEO4 camera has consistently missed sales forecasts, leading to steep price cuts to spur demand. Thats not profitable for the company in the long run, so investors are now holding out hope that GoPros Karma Drone, set to launch later this quarter, is the product that can resuscitate the company.

GoPro bulls belive the launch of Karma drone and a new HERO5 cameras might get the firm back on track, but the company doesnt have a new release date for either device. We only know its gonna be later this quarter.

This puts growth expectations at -302% for EPS and -48% for sales.

Esimize consensus calls for EPS of $-0,55, which is three cents above Wall Street. Revenue expectations of $171,6M are just slightly higher than the Street`s $169,6M. Numbers on the bottom-line have been ratcheted down 899% in just the last 3 months, with top-line numbers reduced 49%.

Watch out for the report on May 5, 2016, after the close.

GoPro aquired smaller companies like Kolor, which produces 360-degree videos, and video editing startups Stupeflix and Vemory, and remain to see if that can help the company to diversify their business.

 

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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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Drone high-growth industry

FedEx, UPS and DHL to name a few are very silent when it comes to drones, while their coming competitors aren`t. I assume they all have busy days with packages from Amazon, but it will be a game changer when Amazon starts with their own drone business.

Not only Amazon are planning to deliver their packages with drones. Alphabet and Wal-Mart two other big companies that is planning to deliver packages via drones and that will happen sooner than we like to know.

FAA regulations are expected to open the up the market for commercial drone operations within 2017. The drone business will create more than 100 000 jobs in the next ten years and it is expected to see an $82 billion impact on the economy.

Other companies in the drone business is AeroVironment, GoPro, Boeing, Nvidia, Qualcomm, Intel, IXYS and Facebook to name a few.

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AeroVironment Inc is engaged in the design, develop, produce, support and operate a technological portfolio of products and services. It supplies unmanned aircraft systems, UAS tactical missile systems and related services within the US DoD.

They are well positioned in a high growth industry and the company will gain from the UAS market in the future. AeroVironment is one of the few companies in the promising small-scale UAS business, and the growing application of drone technology will give them a great opportunity.

Ambarella is nearly four times bigger than AeroVironment, but AeroVironment`s UAS technology is limited to defense and warefare. They benefited from the growth of technologies like predator drones and tactical missile systems, and their UAS technology can give them a great opportunity in the commercial sector.

Cost for consumer or commercial purposes is from $500 to $5,000, and some of the professional equipment could cost between $20,000 to $50,000.

Oil and gas companies can use the drones for inspections. So do mining companies for surveying and mapping. Hospitals and Insurance companies are other interested groups. German-based Spectair Group is heavily involved in the drone manufacturing business and they have three brands; Spectair Services, Flairics and Height-Tech.

GoPro has their own wearable cameras and the cost for their commercial drones is between $500 and $1000. In addition, we have Matternet, which is headquartered in Silicon Valley and Dajiang Innovation Technology, based in Shenzen, China.

The potential is huge.

 

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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. UA-63539824-1.

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Ambarella`s new business opportunity

I have been watching Ambarella for a while and the stock has gone straight up, but that`s until now. So far, 2015 has been a bad year for Ambarella, but despite the huge drop, the stock is still up for the year and even better than S&P 500.

The stock is down over 50% in a few months and the stock has so far been very speculative. The company has profited from GoPro`s success, but as you may know, GoPro has been losing market shares with weaker earnings and guidance for the future.

 

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(Click the image to enlarge)

 

When GoPro missed its guidance for Q3 and told investors a forth-quarter to decline nearly 20% YoY, Ambarella’s shares was also declining. Investors are linking those two companies but that can be a mistake.

But GoPro is not the only customer in the market. The chipmaker has another big opportunity, which can be bigger than GoPro. The new big market is the drone industry, and if you saw my article about Amazon`s new drones, you know that this can be big business.

A green signal from the Federal Aviation Administration will open up a huge market for drones, and Ambarella’s high-end camera chips. The demand for drones with camera will not only increase in the defence industry (U.S Department of Defence) but also by ordinary consumers at Wal-Mart Stores and Amazon to name a few.

Amarella is well diversified and the drone industry is not the biggest income source for the company. Only 10% of their revenue comes from the drone industry, but that can change rapidly in the future.

In addition to their wearable-cameras space, Ambarella’s revenue comes from IP Security and automotive, but that can change in the future. Their biggest competitor in the drone market is probably Aero Vironment, but they are not diversified like Ambarella, while they are focusing just on one segment which is drones.

Market Cap is 1,92B and P/E 25,73 with earning per share; 2,34. Check out the new report on Thursday.

The stock is trading at $60 on Wednesday, which is down from record high of $129,19 in July. GoPros demand for drones in not what investors expected and many are bearish at the moment. The drone market hasnt started yet and Ambarella can be a good investment for long-term investors.

 

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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. UA-63539824-1.

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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.

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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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