Marginal Increases In Availability Of Borrows On GoPro
- GoPro is transforming the way consumers capture, manage, share, and enjoy meaningful experiences.
- Company has a strong, global brand with a consumer and content supported business model.
- With a PEG ratio of 3.19 the stock looks priced for perfection.
- Business focus results in a self reinforcing consumer acquisition model fueling growth.
- Despite strong historical growth and a visionary CEO, the stock is due for a pullback and is a short candidate.
GoPro Or Go Home: Can This Company Sustain Current Valuation?
- Initiating coverage on GoPro Inc. with a SELL rating and $60 Price Target.
- Based on optimistic camera and media revenue, the company is still quite overvalued.
- GoPro as a media company will have to compete with the likes of Red Bull Media House and ESPN.
- This weekend's Hero4 launch may not live up to expectations due to battery issues.
- Despite the likely innocence of donating shares to a charitable trust, a secondary is all but assured.
- If the launch doesn't live up to expectations, Thursday's flush will look small.
- GoPro's stock continues to skyrocket, but as the business fundamentals stay the same, a clear divergence has manifested.
- Investors are overly sanguine about GoPro's prospects as a media company.
- I have been trying to short this stock, but as Interactive Brokers reported, it is one of the hardest stocks to borrow against.
- Since its IPO in late June, GPRO has seen its prices soar to prices above $90/share or +220% gains.
- GPRO will release its second quarterly earnings report on October 30, 2014.
- In upcoming years, GoPro will face a struggle to reach new markets and prove superiority to its competition in the handheld camera sector.
- GoPro's business is booming but the share price is in bubble territory.
- Analyst estimates are far too low to support the company's current valuation.
- Investors have bid up GPRO irrespective of fundamentals and the required earnings growth to support the current share price is impossible to achieve.
- GoPro's hardware business is worth $39.98/share, with its media prospects being valued at $42.12/share.
- High flying IPOs three months prior to their lock-up expiration have been slaughtered.
- January 2016 puts provide an excellent hedge for a market correction.
- Phones like the iPhone 6 and Lumia 1020 have proved that, barring the DSLRs, specialised cameras don’t offer much.
- Even DSLRs are facing stiff competition from smartphones whereas the latter have completely gobbled up the point-and-shoot cameras’ share.
- It’s just an overvalued stock of a company that sells, by and large, just one product for which the market is pretty fickle.
- The revenue growth has been extremely impressive for the company due to a unique product as well as a strong business model.
- Low barriers to entry might result in increased competition for the company in the medium-long term.
- Juicy growth in the sector will certainly result in major players entering the market in order to enhance their own slowing growth.
- The stock is trading at crazy price multiples as the investors continue to focus on the top-line growth.
GoPro: Acknowledged Huge Risk With Potential Huge Rewards
- GPRO stock lock down for employees will end soon. This could be catastrophic to the share price.
- 3D media is increasingly being shared over the internet. GoPro 3D recording system is proven to be Oculus OS/Software ready.
- Current GoPro users have an efficient way to convert to 3D without duplication or wasted investment in their current GoPro device.
- Stock price infers valuation metrics that are impossibly high.
- Priced for perfection but has increasing competition.
- Is merely a camera company but treated like a media company.
- Showing classic bubble stock trading characteristics.
- Lock-up stock coming due will increase the float 5 times.
- Shorts are going to cause GoPro to move, the question is in what direction?
- The stock has an overwhelming valuation with a price/book value over 120 and a market cap of $8.2 bn.
- We've stayed away from GoPro, but will consider whatever trend the stock telegraphs this coming week to make our decision of whether or not we will go short.
GoPro: Fully Diluted Market Cap Is Really $10.4 Billion - Stock Could Fall 75%+
- GoPro shares are up nearly 3-fold from their IPO price in June.
- Factoring in 28.5 million employee stock options and restricted stock units, GoPro has a fully diluted market capitalization of $10.4 billion.
- If the company performs significantly better than the market expects, shares are fully valued (0 upside). In alternate scenarios, shares have 50-75% downside.
- Given the high volatility and high cost of borrowing, selling calls is an interesting way to participate in a share price decline.
There are no Transcripts on GPRO.
Mon, Oct. 13, 10:45 AM
- GoPro (NASDAQ:GPRO) is off sharply after French journalist Jean-Louis Moncet suggested over the weekend a GoPro camera was responsible for the severe head injuries suffered last December by Formula 1 racing legend Michael Schumacher during a skiing accident.
- Moncet, who has talked with Schumacher's son: "The problem for Michael was not the hit, but the mounting of the GoPro camera that he had on his helmet that injured his brain ... The helmet completely broke. It was in at least two parts. ENSA analysed the piece of the helmet to check the material, and all was OK ... The laboratory has been testing to see if the camera weakened the structure."
- Are investors looking for a reason to take profits? Though shares have made new October lows, they're still up over 3x from their $24 June IPO price.
Tue, Oct. 7, 5:40 PM
Tue, Oct. 7, 4:14 PM| 5 Comments
Tue, Oct. 7, 11:23 AM
- GoPro (GPRO +3.6%) is now up 12% since its Hero4 cameras (along with the entry-level Hero) went on sale on Sunday. Shares are up 238% from a post-IPO opening trade of $28.65.
- Barclays' Joseph Wolf has hiked his target by $15 to $60 today, while reiterating an Equal-Weight. "Investors either think GoPro is an extraordinary hardware company, or have a high degree of confidence that the media/content strategy could one day generate billions in revenue," Wolf writes, trying to grasp a valuation he remains uncomfortable with.
- Nonetheless, Wolf thinks the Hero4 launch is going well, and reports "supply chain commentary and [Barclays'] channel checks of Best Buy, Walmart, and Target point to a clean US channel without excess supply."
- GoPro now goes for 8x 2015E sales and 93x 2015E EPS.
- Yesterday: GoPro, Ambarella rally after Hero4 launch, bullish notes
Mon, Oct. 6, 2:48 PM
- JMP has hiked its GoPro (GPRO +7.6%) target by $45 to $105 following U.S. store checks that point to strong early demand for the Hero4 (went on sale yesterday).
- JMP even goes as far as to call Nicholas/Jill Woodman's recent share donation a positive. "Between the crisp execution in getting the Hero4 to market in such a timely manner, the impressiveness of its still expanding online media presence, the ongoing no-show nature of any material competitive threat, and the philanthropic generosity of its founder and CEO, our confidence in the GoPro outlook remains strong."
- Meanwhile, Stifel has hiked its target for video processor supplier Ambarella (AMBA +3.5%) by $3 to $47. "Following over 20 investor meetings with management, we are convinced that Ambarella's focus on high-quality video with highly efficient compression capabilities at low power is redefining applications for video."
- The firm argues Ambarella has at least a 3-year lead on rivals - its HD compression tech is highlighted - and also talks up its non-GoPro opportunities. "While many think of AMBA shares as a play on GoPro, we believe the company is also poised for +20% growth in IP Security, Automotive, Wearables and Drones over the next few years."
Fri, Oct. 3, 9:12 AM
- GoPro (NASDAQ:GPRO) will see a "significantly expanded in-store footprint" at 500 Best Buy stores. Its new Hero4 cameras will act as "the centerpiece."
- The action camera leader calls the setup its "biggest retail display unit." Other GoPro retail partners include Wal-Mart, Target, and Costco.
- Shares are recovering some of the losses they saw yesterday following Nicholas and Jill Woodman's gifting of 5.8M shares to a foundation that won't be subject to lockup restrictions.
Thu, Oct. 2, 5:28 PM
- The foundation created by GoPro (NASDAQ:GPRO) founders Nicholas and Jill Woodman "has no current intention" of selling the 5.8M shares its has been gifted, the WSJ reports.
- Sources add the lockup release provided for the shares "was only done to make the transfer tax-efficient, as an unrestricted gift."
- Shares -0.6% AH in spite of the report. GoPro fell 6.9% in regular trading in response to the Woodmans' move.
Thu, Oct. 2, 12:45 PM
Thu, Oct. 2, 10:47 AM
- GoPro (NASDAQ:GPRO) founders Nicholas and Jill Woodman have gifted 5.8M shares to a "charitable organization" under their names. Lead IPO underwriter JPMorgan has agreed to release the lockup restrictions on the organization's shares.
- The Woodmans sold over 5M GoPro shares through the IPO. They still held 50.8M shares post-IPO, good for a 47.4% stake.
Tue, Sep. 30, 9:57 AM
- GoPro's (NASDAQ:GPRO) new cameras will likely yield "upward pressure" for the company's ASPs, thinks Citi's Jeremy David. His target has been upped by $24 to $94, but a Neutral rating is maintained.
- David expects nearly half of all high-end GoPro buyers to upgrade to the 4K-capable, $499, Hero4 Black ($100 more expensive than the Hero3 Black), more than offsetting the ASP pressure produced by the no-frills, $129, Hero. He now forecasts flat Q4 ASP growth, and 1% 2015 growth.
- Talks with management lead David to think GoPro is unlikely to "aggressively" sell the Hero. "We believe GoPro's $130 capture device was introduced to make it harder for new competitors to enter the market and existing competitors to grab share."
- He sees the total action camera market amounting to only 10M units in 2015, and 12M in 2016. By contrast, David thinks GoPro will ultimately have to ship 20M devices annually to justify its current valuation.
- FBN and Piper hiked their targets yesterday; the former forecast strong Hero4 Black sales, and predicted the Hero will help GoPro "better cater to the masses."
Mon, Sep. 29, 10:31 AM
- As rumored, GoPro's (GPRO +4%) $499 Hero4 Black camera (its new flagship) is the first model in the company's lineup to support 4K video recording; it does so at up to 30fps. The Hero4 Black also supports 2.7K recording at 50fps, and 1080p at 120fps. The recording options are likely enabled by a high-end Ambarella (AMBA +3.9%) A7L video-processing SoC.
- GoPro also says the Hero4 Black features new manual control options, better low-light performance, faster Wi-Fi, an improved UI, the ability to take 12MP photos at 30fps, and "an entirely redesigned audio system that captures high fidelity sound with 2x the dynamic range of previous models."
- The Hero4 Silver, launching at a $399 price point, doesn't support the 3 aforementioned video recording options. But it does include the other feature/image quality enhancements, and is also the first GoPro model to sport a touchscreen that allows users to see their footage.
- GoPro is also launching the Hero, a $129 entry-level camera that can record 1080p video at 30fps. Though unlikely to appeal to its core enthusiast base, the Hero could reel in first-time action camera buyers at a time when penetration rates are still relatively low. In addition, the company's free GoPro Studio video-editing software has been revamped.
- The new cameras go on sale on Oct. 5. GoPro and Ambarella are adding to their Friday gains.
Fri, Sep. 26, 7:04 PM
- JPMorgan's Paul Coster reports GoPro (GPRO +1%) channel checks revealed "intra-quarter stock-outs in both the big-box and specialty channels." That has led him to raise his Q3 GoPro sales forecast to the high end of the company's guidance range.
- Coster maintains a Neutral rating on GoPro - he downgraded on account of valuation last month - but nonetheless argues "the firm’s growth prospects are very good, tilted to the upside relative to sell-side expectations." Coster also notes 40% of the float remains shorted, possibly driving a fresh squeeze.
- Video processor supplier Ambarella (AMBA +5.2%) rallied strongly today. Shares set a new high of $42.77 on Tuesday before selling off.
- Previous: GoPro up sharply following Ambarella's earnings
Thu, Sep. 25, 9:40 AM
- Following a fresh rally over the last few days, GoPro (GPRO) is up 230% from a $24 June IPO price. Shares go for 6.5x 2015E sales, and 79x 2015E EPS.
- The gains come as HTC (OTC:HTCKF) gets set to launch the RECamera, a sports/action camera with a periscope-like design. The RECamera, likely to be launched on Oct. 8, appears to have a much smaller form factor than GoPro's Hero cameras.
- Thus far, GoPro has managed to keep rivals such as Sony, Panasonic, Garmin, and JVC at bay, aided by a strong brand/customer loyalty, an extensive feature set, and a reputation for market-leading image quality.
Fri, Sep. 5, 2:06 PM
- Though several firms have hiked their Ambarella (AMBA +3.5%) targets following the chipmaker's FQ2 beat and strong FQ3 sales guidance, shares have given back some of yesterday's AH gains. A possible factor: Ambarella expects gross margin to drop to 60%-62% in FQ3 from FQ2's 65.1% due to a mix shift towards consumer products.
- GoPro (GPRO +5.5%), however, has added to its gains, likely with the help of short-covering.
- Ambarella tried hard on the CC (transcript) not to share specific details about its expected GoPro sales ahead of the Hero 4 launch. But the company did note sports camera-related SoC sales are expected to rise Q/Q and Y/Y (along with automotive and IP security sales), and that Ambarella has "seen a lot more optimism than we saw four months ago in the consumer spaces," which has led to strong build activity.
- Also, CEO Fermi Wang predicted ASPs will rise Q/Q thanks to a transition to Ambarella's A7L processor line from its A5S, and that Ambarella expects all of its markets to migrate in time to 4K video. The Hero 4 is expected to support 4K at 30fps.
- Ascendiant Capital has hiked its Ambarella target to $42, and is pleased with both security and sports camera sales. However, it doesn't expect GoPro to refresh its lineup before early 2015, and notes Ambarella's infrastructure sales are still a weak spot.
- Piper has hiked its GoPro target to $60: It thinks Ambarella's numbers suggest "GoPro's near-term trends are tracking at least in-line with guidance," and notes survey data points to "strong new customer adoption" of GoPro's cameras.
Thu, Sep. 4, 5:57 PM
- Ambarella (NASDAQ:AMBA) has guided on its FQ2 CC for FQ3 revenue of $60M-$64M, well above a $51.7M consensus.
- Top customer GoPro (NASDAQ:GPRO) is getting a lift from the news, after falling 6.7% in regular trading thanks to a JPMorgan downgrade. Ambarella's guidance could reflect strong build activity for GoPro's upcoming Hero 4 camera.
- Ambarella's FQ2 gross margin was 65.1%, +240 bps Q/Q and +320 bps Y/Y, and above guidance of 61.5%-63.5% (helped drive the EPS beat). GAAP R&D spend +23% Y/Y to $13.5M, SG&A +28% to $6.9M.
- The video-processing SoC vendor says strong sports camera, IP security camera, and UAV demand fueled its FQ2 growth.
- FQ2 results, PR
Thu, Sep. 4, 9:23 AM
- Citing valuation, JPMorgan has downgraded GoPro (NASDAQ:GPRO) to Neutral. The firm has provided its share of positive commentary on the action camera vendor since its IPO.
- Shares closed yesterday at nearly twice their post-IPO opening trade of $28.65. They're currently valued at 56x 2015E EPS.
- Previous: GoPro squeezes higher on strong volume
GPRO vs. ETF Alternatives
GoPro Inc developes hardware and software solutions to alleviate consumer pain points associated with capturing, managing, sharing and enjoying engaging content. It produces mountable and wearable cameras and accessories.
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