Monday, August 25, 2014

GoPro: Should You Ride This Roller Coaster Stock?

This article was originally published by Seeking Alpha on August 20, 2014. 

By Sarfaraz A. Khan. Research Asst. M. Arslan

Summary: GoPro’s latest quarterly results came in better than market’s expectation.GoPro dominates the action camera market and has a real opportunity for growth as a video content provider. However, there are serious concerns regarding this company and its stock.

GoPro (NASDAQ:GPRO), which makes its cameras for adrenaline junkies, has taken its shareholders on a roller coaster ride in less than two months of trading.

In the first few days of trading, the company's shares climbed by 55% in the first couple of days of trading until the beginning of July, dropped by 10% over the next two weeks, soared again by 23% until the end of July, and are down by 8.6% since then.

The company has recently released its quarterly results that were better than market's estimates, but its shares have fallen by 7.2% since the day of the earnings release. And it still doesn't look like a good investment.

Second Quarter

In its quarterly results, GoPro reported 38% year-over-year increase in revenues to $244.6 million, better than market's expectations of $238.1 million, on the back of 30.8% increase in shipments to 854,000 units. The company said that it benefited from an uptake in demand of its products as well as improvement in its relationship with the large distributors.

The net loss ballooned from $5.1 million a year ago to $19.8 million in the second quarter of this year. In adjusted terms, excluding the impact of one-off-times, the company swung to a profit of $11.8 million from …. Read full article at Seeking Alpha