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GoPro Inc (GPRO): Getting Back To Profitability Remains The Key, Says Analyst

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Dougherty & Co analyst believes that even though the management at GoPro is positive, it is vital to regain profitability

With sluggish sales leading to low profitability and eventual losses, GoPro Inc (NASDAQ:GPRO) stock has slid around 21% since the start of this year, through yesterday. Charles Anderson – analyst at Dougherty & Co, believes in the same thing and expressed it in a research note today.

Anderson stated that although the company’s management remains confident of the new products, it is vital to regain profitability. He reaffirmed his Neutral rating on the shares of the action camera producer.

After an upbeat non-deal roadshow in Denver, the analyst believes that the management was aggressively confident regarding GoPro’s new products which are likely to be announced on September 19, 2016. The company will be releasing new iterations of its action cameras, Hero5 camera along with the Karma Drone. The management hinted that both the products will be “considerably easier” to use as compared to the previous models from GoPro and also other products in the market.

However, Mr. Anderson suggests that although the management’s confidence is commendable, getting back to a profitable bottom-line is the key to the story.

The management at GoPro is clear that fiscal year 2016 is an investment year, which leads up to product launches in the holiday season quarter. However, the company does want the similar trend to continue in 2017.

Furthermore, Mr. Anderson suggests that the introduction of new products with higher innovation and a watchful sight over the Operating Expenses can lead GoPro to profitability once more. However, this goal can only be achieved starting from the next year.

GoPro shares trade between the 52-week range of $8.62 and $39.31, while the daily range is $14.10 and $14.66. With a total market capitalization of $1.98 billion, 7.41 million shares of GoPro are traded daily on an average. Currently, the stock is in red, down about 0.48% during the pre-market trading hours today.

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