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GoPro Inc. (Nasdaq: GPRO) Benefitting From Higher Expectations

GoPro Inc. – Nasdaq: GPRO

GoPro shares were over $10 in pre-market trading for the first time since early December and continued their rise (+10%) when the market opened. GPRO, traded on the Nasdaq, ended Monday down 1.16% and ended the day at $9.40 – a long fall from the days when it traded near $100. Investors and news reports are banking that the wearable camera manufacturer has better than anticipate Christmas sales.

Financial Results will be released Thursday – February 2. Investors are likely being appeased by GoPro revising the number of unit sold during the fourth quarter from 1.9 million units to 2.1 million units. Hopes for higher revenues were initially stalled when their new drone offering (named: Karma) had to be pulled from the store shelves due to issues with its battery. However the issues appear to have been addressed and some analysts expect drone shipments to begin again and contribute over $85 million to GoPro’s revenues.

 GoPro sales have steadily increased since 2011 when the firm reported $230 million in sales. In 2015, GoPro posted $1.62 Billion in sales. GRPO shareholders have not seen similar growth in the stock’s EPS. In 2012 GoPro posted an EPS loss of $0.65 following 2011 when they posted a gain of $0.11. The following three years saw positive GPRO EPS at $0.36, $1.07, and $0.27 respectively.

Fifteen firms follow GoPro Inc. Two rate GPRO as a “Strong Buy”, nine rate it as a “Hold”, one rates it as an “Underperform”, and three rate GPRO as a “Sell”. Their consensus price target is $9.25. 

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

1/24/2017
Ticker Symbol GPRO
Last Price a/o 12:21 PM EST  $                    10.37
Average Volume 4.56 million
Market Cap $1.27 Bilion
Sales $1.08 Billion
Shares Outstanding 135.54 million
Share Float 100.62 million
Shortable Yes
Optionable Yes
Inside Ownership 0.40%
Short Float 33.18%
Short Interest Ratio 7.32
Quarterly Return -36.27%
YTD Return 7.92%
Year Return -13.20%

GoPro, Inc. (Nasdaq: GPRO) Short Target – But for How Long?

GoPro Inc.; Nasdaq: GPRO

Since November 7, 2016 four of the 15 analysts covering GoPro Inc. have downgraded its shares – traded on the Nasdaq under ticker symbol GPRO. Currently two analysts rate it as a “Strong Buy”, ten rate it as a “Hold”, one gives it an “Underperform”, and two have it rated as a “Sell”.

In 2014 GPRO was trading over $90, today it is trading in the $9 handle. GPRO shares have a Short Float figure over 32%. This means that for all the shares typically available to the investing public, over 32% have been borrowed as part of a short-sale which will profit if the shares decline in price. This is a fairly high figure by industry standard.

But the blame does not fall solely on short-sellers. GoPro Inc made an expensive effort to be a deliverer of content. Although they spent a lot of money trying to develop that market, success never materialized and GoPro Inc recently announce it will lay off about 15% of its workforce in an attempt to return to profitability in 2017.

Should GoPro Inc. continue its sales growth (year-on-year increases since 2011) and reverse GPRO EPS losses, shorts could be forced to cover their positions which might send shares of GPRO up rapidly. One must wonder just how much more the bottom is for this beleaguered stock.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

12/22/2016
Ticker Symbol GPRO
Last Price a/o 2:48 PM EST  $               9.02
Average Volume 6.19 million
Market Cap $1.1 Billion
Sales $1.08 Billion
Shares Outstanding 135.57 million
Share Float 100.59 million
Shortable Yes
Optionable Yes
Inside Ownership 0.50%
Short Float 32.59%
Short Interest Ratio 5.3
Quarterly Return -44.55%
YTD Return -50.58%
Year Return -51.47%