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GoPro Stock Lost Close to 6% on May 28

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GPRO’s returns

Shares of consumer technology stock GoPro (GPRO) fell 5.8% on May 28 to close the day at $6.78. Despite the recent pullback, GoPro shares have outperformed the markets this year and are up an impressive 60.0% in 2019. GoPro stock has gained 14.7% since the start of May 2019.

GoPro stock is currently trading 69.5% above its 52-week low of $4.0 and 11.4% below its 52-week high of $6.78. Comparatively, GoPro’s peers Fitbit (FIT), Garmin (GRMN), and Fossil (FOSL) have generated returns of -1.8%, 22.1%, and -32.0%, respectively, this year.

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Is the stock overvalued?

GoPro stock gained 25% in the first half of May 2019 after the company announced its decision to move its production capacities to Mexico from China. GoPro stated that it would shift the manufacturing of its US-bound products to Mexico, while cameras bound for other countries would still be manufactured in China (FXI).

The development will help GoPro avoid the fallout of the trade war between China and the United States. GoPro is expected to begin production in Guadalajara, Mexico, by June.

Impressive first-quarter results also drove GoPro stock higher earlier this month. GoPro’s sales rose 20.0% year-over-year to $243 million in the first quarter, up from $202 million in the previous year’s quarter. It reported EPS of -$0.07. Wall Street had expected GoPro to post sales of $234 million and EPS of -$0.09 in the first quarter.

Though GoPro stock has risen this year, it has burnt significant investor wealth since its IPO. The stock is trading over 90% below its all-time high price of ~$90.0.

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