GoPro, Inc. (NASDAQ: $GPRO) is a leading developer, marketer, and seller of cameras, mountable and wearable accessories, subscription services, and software.
It operates in the Americas, Africa, the Middle East, Europe, and the Pacific. In short, GoPro sells products all over the world. Its history dates back to 2002 in San Mateo, California.
GoPro Stock Earnings Report
In its most recent fiscal Q2 earnings report, the company reported a revenue of $241.02 million, against an expected $221.61 million, a surprise of 8.76%. However, that was still a reduction of 3.86% year-on-year compared to the same period in 2022.
It reported a net income of -17.21 million, a drop of -783.29% year-on-year from a net income 0f $3 million. GoPro Stock EPS was the same as the analysts’’ prediction of $-0.07.
Upcoming Earnings Report Forecast
GoPro will release its Q3 earnings report on November 7, 2023, for Q3 ending September. In the report, the analysts give GoPro stock an EPS estimate of $0.05, a downgrade from a previous $0.04 estimate. In Q1 2024, analysts give the stock an EPS estimate of $0.13, while they estimate an EPS of $0.08 in Q2 2024.
GoPro Stock Price Analysis
GPRO stock opened at $2.43 on Monday, October 30, 2023. Its market cap is currently $371.13 million, with a PE ratio of -13.50 and a beta of 1.39. It has a 12-month low of $2.41 and a high of $6.57. Its 50-day moving average is $3.22. The debt-equity ratio stands at 0.25. The stock has had a tough year, as the stock has dropped 52.17% of its value year-to-date. In the past 30 days alone, GPRO stock has dropped 19.14% of its value.
Why GoPro Stock Is Falling
GoPro stock achieved its all-time high of $93.85 in 2014. However, the stock has since dropped and is currently trading at around $2.4435 as of October 30, 2023. That is a huge downgrade for investors. However, there is a good explanation.
GoPro is currently undergoing a major transition. It has moved on beyond selling quality camera hardware, and it is unlocking new revenue streams with better profit margins. For many years, GoPro focused on cameras and wearable accessories. However, selling hardware comes with low margins.
In the past few years, GoPro has introduced subscriptions via GoPro.com. Additionally, they launched a smartphone camera-editing smartphone app. They are also working on a video-editing software. GoPro.com subscriptions offer customers major price discounts, unlimited cloud storage, and live streaming capabilities at just $49.9 a year.
Subscription revenue comes with a gross profit margin of up to 80%, while camera hardware only offers a margin of up to 40%. Consequently, growing the segment will be key to boosting profitability. In its Q3 earnings report, GoPro reported that its subscriber base grew by 27% year-over-year to 2.44 million.
GoPro revealed that subscription and service revenue accounted for 10% of total revenue at $24 million. Additionally, it revealed that the segment had experienced a year-over-year growth of 21%.
GoPro Stock Forecast
Stock market analysts give GoPro stock a moderate buy rating. Based on the current price of $2.44, they give it an average price estimate of $5.15, with a high estimate of $6 and a low estimate of $4.30. The average price estimate would be a 111.07% upside on the current price.
Is GoPro Stock Worth Buying?
GoPro stock is currently at the low end of its valuation. However, the company is in the middle of a transition. If it succeeds in the change to its business model, it could become one of the best-performing stocks in the future. However, there is still a long way to go before it achieves that.
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