JPMorgan Defends GoPro (GPRO) on Sell-Off

JPMorgan analyst Paul Coster came out to defend GoPro (NASDAQ: GPRO) which is lower following a note from Piper Jaffray this morning highlighting that the company is not shipping to Amazon currently. Coster believes the sell-off represents a buying opportunity.

Coster said they believe this hiatus originates in a commercial dialog between GoPro and Amazon that "probably gets resolved by the end of the month and before the start of the holiday-season ramp." He also notes the hiatus does not apply to international Amazon sales.

The analyst said assuming said Amazon represents ~10% of sales, the one month impact would be 30K units through this channel, or less than $10 million in GoPro sales.

Coster said the decision to forego the Amazon channel for one month is a voluntary move on the part of GoPro. This likely means prortionately higher sales are going through the GoPro online store, which commands higher margins than other channels.

Based on a conversation with the company this morning, they believe GPRO will start shipping the Hero 5 into Amazon
in November, and ahead of the critical 6-week holiday period. Separately, Karma drones will be supply-constrained at the get go, so they expect the product to be allocated selectively to channel partners.

The firm reiterated an Overweight rating and price target of $16 on GPRO.

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 $14.30 yesterday.

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