GoPro (GPRO) stock has had a spectacular run this year. The stock has gained 25% since the start of May 2019 and is up by a whopping 74% in 2019. However, despite impressive returns this year, GoPro has burnt significant investor wealth over the years.
GoPro stock has declined at an annual rate of 6% in the last three years and has fallen 26% annually since its IPO in 2014. Does GoPro have significant upside potential or has the bull run come to an end? GoPro stock is already trading close to its 52-week high.
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Revenue and earnings growth
GoPro will achieve non-GAAP (generally accepted accounting principles) profitability in 2019. The company’s earnings are estimated to rise by 261% in 2019 and 16.2% in 2020. However, earnings are expected to rise by just 10% annually in the next five years.
In comparison, GoPro’s sales are estimated to rise at a CAGR (compound annual growth rate) of 3% over the next three years. GoPro will need to beat Wall Street estimates in the coming quarters and also provide robust guidance to keep investors interested.
The stock will move higher if GoPro’s products experience strong demand especially in the holiday season of 2019. GoPro products are still targeted at a niche segment, especially in emerging markets (EEM). GoPro will be launching products across price points and will hope to drive incremental sales going forward.
Wall Street estimates
Of the 13 analysts tracking GoPro stock, two have given it “buy” recommendations, nine have given it “holds,” and two have given it a “sell.” The average 12-month target price for GoPro is $7.38, which is the same as the stock’s current price.