The chart says it all. GPRO now has a market cap well over $11 billion and its stock is trading near $100 (with a 52W-low at just $29 a few weeks ago when the IPO took place):
www.finviz.com/quote.ashx?t=gpro
This is simply madness based on fundamentals and was probably fueled further in the last days thanks to updated HERO cameras announced for the 2014 holiday season.
Even at an assumed future $5 billion in revenue and EPS of $1.5 (roughly using 5x the actual 2013 numbers as an example) GPRO would now be grossly overvalued.
I guess GPRO is an example of Peter Lynch's investments methods gone wrong. Simply because the products are loved and well-known, retail investors seem to be willing to pay any price to snap up GPRO shares.
Unfortunately, the stock can't be sold short at the moment (at least not at reasonable borrowing rates, it's one of the most expensive stocks to short in September 2014) and the GPRO put options have heavy premiums and spreads to drive a truck through.
Like other bubble stocks I discussed back in February/March 2014 and back in 2013 I expect GPRO to come down to Earth.
Some catalysts when the dream could end? A lockup expiration in late 2014 and a lack of new products in H1 2015 could let reality and fundamentals sink in at GPRO.
GPRO of course has well-known "bubble companions" in the sector, here are the other companies on my informal tech bubble watch list I compiled back in 2013:
My personal "full bubble" target ranges in USD for the list are:
NFLX: 350-400 or above
LNKD: 300-350 or above
FB: 60-75 or above
AMZN: 400 or above
TSLA: 150-250 or above
I allocated the highest spread of "bubblemania range" to TSLA at 150-250 USD because of its violent recent swings.