GoPro (GPRO): After Missteps, Company Could Be Approaching Inflection Point - Wedbush

Wedbush analyst, Nick McKay, reiterated his Outperform rating on shares of GoPro (NASDAQ: GPRO) and believes that after a long stream of missetps, the company may be at a positive inflection point.

For the quarter, revenue was $221 million, versus consensus of $194 million. ASPs drove the upside, reflecting strong demand for GoPro’s higher-end devices. Top-line upside was not surprising given recent commentary at investor conferences and our channel checks. NonGAAP EPS was $(0.52), versus consensus of $(0.58).

The HERO5s and Karma drone are on track to launch ahead of the holiday season, with GoPro expecting a return to profitability in Q4. The company maintained full year revenue guidance of $1.35 – 1.50 billion. GoPro did not provide many specifics about the new products, although ease-of-use for the HERO5s in particular appears to be an area of focus. There may be some initial sell-in of the HERO5s towards the end of Q3, with the Karma more likely to be a Q4 launch. Sales mix between the new devices was not provided, although management did mention that they would “contribute to the largest introduction of products in our history” for its “most exciting fourth quarter ever.” Implied 2H:16 revenue guidance of $946 – 1,096 million is above the $914 million that GoPro saw in 2H:14 when the HERO4s launched.

The price target increases to $14.50 (from $13.00).

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

Shares of GoPro closed at $11.57 yesterday.

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