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Why Did GoPro Stock Fall on February 8?

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Feb. 10 2017, Updated 7:37 a.m. ET

GPRO falls 5.4%

GoPro (GPRO) stock fell 5.4% on February 8, 2017. GoPro announced its 4Q16 results last week and posted revenues that fell below analyst estimates. GoPro also provided weak guidance for 1Q17, causing its stock to fall 13% on February 3. In the trailing five-day period, GoPro stock has fallen more than 16%.

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Analyst comments

Raymond James analyst Tavis McCourt downgraded GoPro (GPRO) from “market perform” to “underperform.” McCourt attributed the downgrade to poor sell-through trends of the HERO5 line of products and stated, “We draw the conclusion that the action camera category is clearly mature to the point that even product refreshes seem unable to drive growth.” Sell-through refers to the percentage of units shipped that are actually sold.

RW Baird also downgraded GPRO stock from “neutral” to “underperform,” reducing the stock’s one-year price target from $10 to $8. J.P. Morgan (JPM) also cut GoPro’s target price from $11 to $12.

However, CFRA Research analyst Angelo Zino was optimistic with respect to the “robust demand” for the Hero 5. Zino reiterated the $12 price target, noting, “We are very wary of GoPro’s ability to succeed in the drone space but see benefits from international expansion.”

What do analysts recommend for GoPro?

Of the 18 analysts covering US-based (SPY) GoPro (GPRO), one gave it a “buy” recommendation, seven recommended a “sell,” and ten recommended a “hold.” Analysts’ stock price target for the company is $8.93, with a median target estimate of $9.25. GoPro is trading at a discount of 4.6% to median analyst estimates.

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