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Why Did GoPro Stock Slide after Its 4Q16 Results?

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GoPro announced earnings below analyst estimates

On February 2, 2017, GoPro (GPRO) announced its 4Q16 results and reported revenues of $540.6 million. Although its revenues rose 23.8% YoY (year-over-year), the company’s stock fell over 13% in after-hours trading as revenues and guidance were below analyst estimates. Non-GAAP[1. generally accepted accounting principles] EPS (earnings per share) rose to $0.29 in 4Q16 from -$0.08 in fiscal 4Q15.

GoPro’s operating income rose to $31.6 million in 4Q16 compared to an operating loss of $21.6 million in 4Q15. Net income for GoPro rose to $42.4 million from a net loss of $11.4 million in 4Q15.

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What did analysts expect from GoPro in 4Q16?

Analysts estimated that GoPro (GPRO) would post revenues of ~$577.0 million for 4Q16, with a low estimate of $515.2 million and a high estimate of ~$608.8 million. Analysts estimated EPS of $0.23, with a high estimate of $0.32 and a low estimate of $0.10.

GoPro stock has been in a downward spiral since 2016, falling more than 50%. The trailing 12-month period has been a difficult one for GoPro. Several analysts recently noted that GoPro could end its troubles if it could focus more on building its Action Camera business, which seems to have bright prospects.

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