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GoPro Rises after Its KARMA and HERO5 Product Launches

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Price movement

GoPro (GPRO) has a market cap of $2.1 billion. It rose by 7.2% to close at $16.05 per share on September 22, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 13.4%, 3.5%, and -10.9%, respectively, on the same day.

GPRO is trading 12.5% above its 20-day moving average, 17.6% above its 50-day moving average, and 25.6% 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. The ETF 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. The YTD price movement of JKL was 15.0% on September 22.

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

  • Canon-ADR (CAJ) — $39.1 billion
  • Sony Corp.-ADR (SNE) — $43.3 billion
  • Best Buy (BBY) — $12.1 billion

Latest news on GoPro

GoPro (GPRO) continued its rise on September 22, 2016, after it launched its KARMA drone and a new HERO5 camera.

On September 20, 2016, J.P. Morgan also provided its views about the launch of GoPro’s new products. According to TheStreet, “JPMorgan said the company’s three new product launches yesterday may ‘not yet be actionable for investors’.”

On September 19, 2016, GoPro launched new products and services including the HERO5 Black – The Best GoPro, the HERO5 Session – The Best, the Karma, the GoPro Plus, and Quik Apps.

GoPro’s performance in 2Q16

GoPro (GPRO) reported 2Q16 revenues of $220.8 million, a fall of 47.4% compared to $419.9 million in 2Q15. The company’s gross profit margin fell 9.0% in 2Q16 compared to 2Q15.

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 EBITDA[1. 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 41.5% and 52.2%, respectively, in 2Q16 compared to 4Q15. Its current ratio fell to 2.1x, and its debt-to-equity ratio rose to 0.45x in 2Q16, compared to its current and debt-to-equity ratios of 2.8x and 0.43x, respectively, in 4Q15.

The company expects revenues of $1.4 billion–$1.5 billion in 2016.

In the final part of this series, we’ll look at Canon (CAJ).

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