Consumer Electronics

What to Expect From GoPro Earnings

GoPro Inc. (NASDAQ: GPRO) is scheduled to report its fourth-quarter financial results after the markets close on Wednesday. The consensus estimates from Thomson Reuters call for no earnings and $496.10 million in revenue. In the same period from the previous year, the company posted $0.99 in earnings per share on revenue of $633.91 million.

This stock has been on the long way down after it debuted on the market in 2013. Shares were above $90 at one point, but since then they have slowly retreated to the current price level. The stock has been pushing lower lows, well below the IPO price, so a technical bounce might be out of the question, and calling a bottom now might not be realistic.

Previously, GoPro announced that it expects revenue to be roughly $435 million for the fourth quarter of 2015 and $1.6 billion for the calendar year.

Fourth-quarter revenue reflects lower than anticipated sales of its capture devices due to slower than expected sell through at retailers, particularly in the first half of the quarter. At the same time, fourth-quarter revenue includes a $21 million reduction for price protection related charges resulting from the HERO4 Session repricing in December.

We can also expect to hear an update about GoPro’s restructuring in this coming report. In a press release from January, the company said:

Over the past two years, GoPro’s headcount has grown by more than 50% annually, to more than 1,500 employees at the end of 2015. To better align resources to key growth initiatives, GoPro has implemented a reduction in its workforce of approximately 7%. The Company estimates it will incur approximately $5 million to $10 million of restructuring expenses in the first quarter of 2016, substantially all of which will be severance costs.

A few analysts weighed in on GoPro prior to the release of its earnings report:

  • Citigroup reiterated a Hold rating with a $12 price target.
  • Piper Jaffray reiterated an Underweight rating with a $7.50 price target.
  • Wedbush reiterated an Outperform rating with an $18 price target.
  • Oppenheimer reiterated a Market Perform rating.

So far in 2016, GoPro has underperformed the broad markets, with the stock down 43% year to date. Over the course of the past 52 weeks, the stock has dropped 80%.

Shares of GoPro were trading up 2.3% at $10.48 on Wednesday, with a consensus analyst price target of $16.85 and a 52-week trading range of $9.90 to $65.49.