Stock has gained close to 25% this month
GoPro’s (GPRO) stock has gained an impressive 25% in May 2019 at a time when the broader markets have pulled back and consumer technology stocks have generated negative returns.
The S&P 500 ETF (SPY) has fallen 3.6% this month, while the PowerShares QQQ ETF (QQQ) is down 4.8%. The technology ETF (XLK) has lost 5.4% in May 2019. In comparison, peer consumer tech stocks such as Fitbit (FIT) and Garmin (GRMN) have lost 3.2% and 9%, respectively, this month.
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GoPro has confirmed that the company will shift its manufacturing facility for US-bound products to Mexico from China, which would help GoPro somewhat escape the trade war between the US and China. However, this was not the only driver for GoPro’s recent stock rally.
Impressive quarterly results
GoPro announced its first-quarter results last week and reported sales of $243 million, a rise of 20% YoY compared to sales of $202 million in the prior-year quarter. The company’s adjusted EPS were -$0.07. Wall Street expected GoPro to post sales of $234 million and EPS of -$0.09 in the first quarter.
In the above chart, we can see that GoPro’s sales in the first quarter rose from $184 million in 2016 to $219 million in 2017. Sales then fell to $202 million in 2018 and are estimated to reach $247 million in 2020.
Sales from GoPro.com accounted for 10% of first-quarter sales and rose 90% YoY. GoPro’s earnings beat and the shift of its manufacturing facility sent the stock skywards in May 2019.