The closing sentence of Citi Analyst Jeremy David’s latest note on GoPro was so strange we had to read it twice. He declared: “Our bull thesis based on flying cameras is still intact.”
The occasion for David’s proclamation was the camera maker’s announcement Monday that is is reducing the price of its HERO4 Session from $400 to $300.On its website GoPro describes the recently launched camera as a simplified version of its HERO4 Black and HERO4 Silver, which cost $500 and $400 respectively. Apparently consumers weren’t buying the sales pitch – ”HERO4 Session packs the power of GoPro into our smallest, lightest, most convenient camera yet, featuring a rugged and waterproof design, easy one-button control, 1080p60 video and 8MP photos” — at the higher price.
Citi quotes that GoPro Chief Financial Officer Jack Lazar saying, “The economics of the Session still make a lot of sense at $300.” However, the decline is a clear blow for the consumer tech company and it’s CEO Nick Woodman. “I couldn’t be more proud of our aggressive pace of innovation,” said Woodman in a statement when the company announced second quarter earnings in July. “We’ve launched five new cameras in the past 10 months, exciting both new and existing customers and contributing to strong second quarter results.”
In an appearance last week Woodman did admit the camera was not selling as hoped, reported FORBES’ Ryan Mac.
For its part Citi writes: “We believe the price cut on the Session is not a reflection of increased competition, or a loss of interest in the category, but simply the result of a product line extension that is not catching on. While GoPro appears to believe that they can turn around the Session, we believe 2016 is all about the flying camera and the HERO5 (an update to the regular form factor, with 4K60 at the high-end, and a completely redesigned mobile app experience for editing and sharing on the go). The stakes are high for these product launches to go smoothly.”
Recommended by Forbes
In short Citi is saying that 2015 is a lost year for GoPro, but analysts remain bullish because flying cameras would be cool. To be fair, David is not the only analyst excited by this prospect. Over the summer Barclays analyst Joseph Wolf said in a note that he is excited about drones, and expects the flying devices to drive GoPro’s earnings growth in 2017.
Shares of GoPro opened in positive territory Wednesday, up 1.5% from Tuesday’s close at $30.30. This was seemingly due in part to the long term bullish tone of the Citi note, which was distributed overnight. The bump, however, is pretty meaningless in a year when the tech company’s stock has plummeted more than 50%. Sure stocks at large have slumped in recent months but not as dramatically. The tech heavy Nasdaq, by comparison, is down less than 5% year-to-date.
Citi has a $90 target price on GoPro.
No hay comentarios.:
Publicar un comentario