GPRO got hammered again today:
Analysts Follow GoPro Down
By Maureen Farrell
Wall Street Journal
3:58 pm ET, Jan 14, 2016
Investors in GoPro Inc. took their latest hit Thursday after the company issued an earnings warning, sending the company’s shared down more than 20%.
Now, analysts are racing to ratchet down their price expectations.
According to FactSet, the average analyst price target now is $20.50, down from $32.56 as of Dec. 31 and down from $76.29 in August.
GoPro GPRO -14.58% didn’t respond to immediate requests for comment Thursday. Even after dropping their targets, the average price target analysts have given GoPro is 60% above its stock price of $12.52 in recent trading. Shares of GoPro have dropped more than 75% over the past 12 months.
S&P Capital IQ analyst Angelo Zino cut his target to $15, about 20% above its trading price Thursday, saying there’s low visibility right now into the company’s earning potential. His new price target is down from $35 previously.
One of the stock’s uber-bulls, Alex Gauna, took his price expectations down by more than 75% to $21 from $90. He said GoPro’s announcement that it was cutting 7% of its staff is a tacit acknowledgement that the company “doesn’t have line of sight to immediate recovery.”
Mr. Gauna also cited GoPro’s announcement that Zander Lurie, senior vice president of entertainment at GoPro, would be leaving the company’s executive team but joining the board. The possibility of GoPro’s bringing exciting entertainment offerings to market was part of why Mr. Gauna had such a high price target on GoPro, he said. With Mr. Lurie’s exodus, Mr. Gauna said he’s much less optimistic on this part of the business.
Citigroup Inc. C +0.42% analyst Jeremy David called GoPro’s stock “more or less dead money” for the foreseeable future. He cut his price target to $12 Wednesday night from $22 after downgrading the company to neutral from a buy in December. He expects the stock to stay relatively range-bound over the next few months.
Still, GoPro’s next product could revitalize its flagging stock. The company is expected to launch a new line of products in the first half of 2016 — a flying camera. Should that product catch on, investors could return.
But Northland Securities’ Gus Richard cautioned that the drone market has become very competitive “and may not provide a significant revenue contribution.”
The rest of the GoPro story will be written in the second part of 2016, he said.
blogs.wsj.com |
