GoPro (GPRO - Snapshot Report) specializes in wearable camcorders to record people’s activities from a first person view. The unique perspective has been gaining popularity on YouTube, as well as other video viewing mediums. As a result, there has been a great deal of anticipation going into the company’s latest earnings report. Rightly so, as the stock has endured a lot of volatility since its IPO.
The stock quadrupled just a few months after its IPO, as investors have high expectations for the company to live up to. However, investors were especially antsy going into this report, seeing how the stock has lost more than half its value in the last few months alone.
Still, it’s interesting to note how GPRO has exceeded investor expectations in its earnings report. And furthermore, GoPro had been downgraded in the last week, going from a Zacks Rank #1 (Strong Buy), to a Zacks Rank #2. It may very well change upon the news of the earnings report and outlook though.
Earnings: GPRO beat the Street consensus which called for EPS of $.70. The company actually posted a beat by $0.29, posting an EPS of $.99.
Revenue: Revenues passed expectations by a long shot. GoPro posted revenues of $633.9 million, compared to our consensus estimate of $565 million.
Key stats to note: The company’s leading product, the HERO3+black edition, continued to be the biggest seller for the company during the fourth quarter. Revenues from its direct sales channels went up 115% year over year, for revenues of $187.2 million. Looking into the future, the company expects gross at 44%, give or take 50 basis points.
The company also announced that it will have its own channel on Roku. If this project is successful, the channel revenues will become a significant component in assessing the company’s earnings in the future.
Stock Price: Shares were up 5.03% before the report and were up marginally after the beat. However, thanks to a sluggish outlook and margin concerns, shares have crashed in after-hours trading, sending GPRO lower by about 15%, so we will definitely need to pay attention to this stock in Friday trading.
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