FBN Lifts PT on GoPro (GPRO) to $15 Amid New Product Unveilings

September 19, 2016 2:57 PM EDT
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Price: $9.17 -0.54%

Rating Summary:
    5 Buy, 12 Hold, 6 Sell

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Today's Overall Ratings:
    Up: 23 | Down: 34 | New: 34
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FBN boosts its price target on Sector Perform-rated GoPro (Nasdaq: GPRO) from $13 to $15 following today's presentations and product introductions.

The firm commented, Today, GPRO finally unveiled the HERO5 Black, the HERO5 Session, and Karma (its first drone). What impressed us most were the video stabilization features added to its HERO5 Black, HERO5 Session (but not the prior generation HERO Session), and Karma (see table below). GPRO also announced a new service called GoPro Plus for $4.99 per month (after a free trial) which automatically uploads photos and videos to GoPro Plus, its cloud-based subscription service. A concern is that the new HERO5 Black, at $399, will be priced $50 to $100 below the prior HERO4 Black price of $449.99 to $499.99. Offsetting this somewhat is that there will not be a HERO5 Silver (at least for the time being), and since before the majority of GPRO cameras at price points above $399 were Silver (vs. Black), the net negative impact on ASPs (vs. our model, which already had ASPs coming down) could be minimal. The company is pricing the HERO5 Session at $299.99, a hundred dollars higher than the HERO Session, since the HERO5 Session has video stabilization features and the ability to automatically upload to the cloud. However, we believe that this price point may be too high and that the company may lower this price point in the future (just as it did with the HERO Session over the past year). Karma will face strong competition from DJI, whose Phantom 4 goes for $1,199, but Karma will not have Follow-Me or Object Avoidance “for now”.

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