GoPro (GPRO): Not Enough Evidence to Support Growth Outlook - Dougherty

November 4, 2016 7:45 AM EDT
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Dougherty & Co. analyst, Charles Anderson, reiterated his Neutral rating on shares of GoPro (NASDAQ: GPRO) after the company missed Q316 expectations badly and guided Q416 below consensus. The analyst had the lowest estimates of consensus but were above the Street-low expectations.

Management blamed the miss and guide-down entirely on an undisclosed production issue that is supposedly fully resolved. The analyst's view is that there is too much ground to make up in Q4 with unit guidance close to unchanged and that there is not enough evidence to support strong Holiday sell-through of the Hero 5 cameras.

Management then guided to Q416 revenue/EPS of $625MM/$0.30 vs. consensus of $666MM/$0.44. Despite the weakness, management guided to "double digit" revenue growth in FY17 and positive net income based on a reduction of OpEx to $650MM which is ~$80MM lower than FY16 estimate. To get to positive net income and assuming GM% is flat at 40%, GoPro would thus need to do over $1.6B of revenue in FY17.

For an analyst ratings summary and ratings history on click here. For more ratings news on click here.

Shares of closed at $ yesterday.

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