Why Did GoPro Rise ~8.3% on September 15?



Price movement

GoPro (GPRO) has a market cap of $2.1 billion. It rose 8.3% and closed at $14.16 per share on September 15, 2016. The stock’s weekly, monthly, and YTD (year-to-date) price movements were 4.3%, -8.0%, and -21.4%, respectively, on the same day. GoPro is trading 1.7% below its 20-day moving average, 6.3% above its 50-day moving average, and 9.8% above its 200-day moving average.

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Related ETF and peers

The iShares Morningstar Small Value ETF (JKL) invests 0.20% of its holdings in GoPro. JKL tracks a market-cap-weighted index of US small-cap value stocks. The index stocks from the 90th to the 97th percentile of the market-cap spectrum, using fundamental factors. JKL’s YTD price movement was 11.6% on September 15.

The market caps of GoPro’s competitors are as follows:

  • Canon (CAJ) – $38.5 billion
  • Sony (SNE) – $42.4 billion
  • Best Buy (BBY) – $12.3 billion

Latest news on GoPro

GoPro rose more than 8.3% on September 15, 2016, after the video of KARMA was available on the website. KARMA will be launched on September 19, 2016. GoPro already announced KARMA in its 2Q16 results.

According to Nicholas Woodman, GoPro’s founder and CEO, “HERO5 and Karma will contribute to the largest introduction of products in our history, all in time for what we believe will be GoPro’s most exciting fourth quarter, ever- a quarter where we expect to return to profitability.”

Investors also expect KARMA to perform well in 2H16.

Performance in 2Q16

GoPro reported 2Q16 revenue of $220.8 million—a fall of 47.4% compared to revenue of $419.9 million in 2Q15. The company’s gross profit margin fell 9.0% in 2Q16—compared to the same period last year.

Its net income and EPS (earnings per share) fell to -$91.8 million and -$0.66, respectively, in 2Q16—compared to $35.0 million and $0.24, respectively, in 2Q15. It reported adjusted earnings before interest, tax, depreciation, and amortization and adjusted EPS of -$76.8 million and -$0.52, respectively, in 2Q16—compared to $75.3 million and $0.35, respectively, in 2Q15.

GoPro’s cash and cash equivalents and inventory fell by 41.5% and 52.2%, respectively, in 2Q16—compared to 4Q15. Its current ratio fell to 2.1x and its DE (debt-to-equity) ratio rose to 0.45x in 2Q16—compared to a current ratio and a DE ratio of 2.8x and 0.43x, respectively, in 4Q15.

The company expects revenue of $1.35 billion–$1.5 billion for fiscal 2016.

In the next part, we’ll discuss Sonoco Products (SON).


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