Why GoPro Earnings Are Taking It to New All-Time Lows

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GoPro Inc. (NASDAQ: GPRO) just could not put it all together on Wednesday. At first the company had a strong performance during the regular trading session, but after the release of its third-quarter earnings report everything went south.

This company has constantly been mired in adversity since its stock peaked just over a year ago. Questions about growth and valuation still remain unanswered, and one can see that just based on these results and the reaction to this earnings report. Ultimately, GoPro’s management will have to prove that it is not just a one- or two-trick pony.

GoPro had $0.25 in earnings per share (EPS) on $400.34 million in revenue compared to Thomson Reuters consensus estimates that called for $0.29 in EPS on $433.60 million in revenue. The same period from the previous year had $0.12 in EPS on $279.97 million in revenue.

The board of directors authorized a $300 million share repurchase plan which may not seem like much but considering this company only has a market cap of $4 billion, it is nearly 10%.

During this quarter, the company launched GoPro Awards, granting up to $5 million annually to creators of GoPro content for sharing their best photos, raw video clips and video edits with GoPro for inclusion in GoPro Channel programming, licensing and more. In the first week, the GoPro creative community submitted 27,000 content submissions.

GoPro founder and CEO, Nicholas Woodman, commented on earnings:

I am proud of our year-to-date accomplishments in which we posted strong financial results and expanded our portfolio of products, however our business in the third quarter was clearly more difficult than anticipated. GoPro is entering the holidays with an industry-leading lineup backed by great software solutions and a globally-recognized brand. We are excited about our business and the investments we continue to make to scale GoPro into its next phase as a product, software and entertainment company.

On the books, cash, cash equivalents, and marketable securities totaled $513.1 million at the end of the third quarter, compared to $422.2 million at the end of December 2014.

Shares of GoPro closed Wednesday up 7% at $30.21, with a consensus analyst price target of $56.00 and a 52-week trading range of $26.68 to $87.50. Following the release of the earnings report, shares were down 14% at $25.95 in the after-hours trading session.

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