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GoPro Stock: Value Rising on Karma & Fusion Sales

Posted On September 13, 2017 2:51 pm
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A GoPro Karma Drone

GoPro stock is rising after the company announced last week that it expects the revenue and gross margin to be better than its guidance range for the third quarter. The company also expects its third quarter to be profitable on non-GAAP basis. GoPro now expects its third quarter revenue to come in at $290 million-$310 million, better than the consensus estimate of $304.04 million. The action camera maker also expects its gross margin to come in between 36% and 38%.

JPMorgan recently upped its price target for GoPro Inc to $15 from $13, and gave an “Overweight” rating for the stock. JPMorgan analyst Paul Coster is bullish on the stock as he expects the company to turn to full-year profitability amid a surge in demand, cost containment, and “solidly executed” product launches. Mr. Coster also increased his 2018 EPS estimates for GoPro. He now expects GoPro to earn $0.57 per share profit next year.

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GoPro COO CJ Porber recently said in a program on CNBC that GoPro is experiencing a strong consumer demand, and that the company is turning its business around. GoPro stock was languishing a few weeks back, amid strong concerns from investors that GoPro might not be able to sustain growth and demand because of the cutthroat competition from giants like Garmin, Sony and Samsung. The stock also took a hit after delays and recalls of Karma drone and production issues with Hero5. But the firm is making a strong comeback.

Wall Street has high hopes for GoPro Hero6 and 5.2k spherical camera, Fusion. This new camera could rake in massive sales for the company in the upcoming holiday season. GoPro plans to sell Hero6 in retail and distributor channels. The GoPro Karma drone has been a huge success in the US. The company is now expanding the drone in international markets.

GoPro Inc has taken several measures to cut expenses. The company has cut about $200 million from annual costs. In March 2016, GoPro fired 270 people, followed by 200 layoffs in November. The company also closed its entertainment and media business.

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