GoPro Inc

GoPro, Inc. (NASDAQ: GPRO) produces cameras, and mountable and wearable accessories. The Company offers a family of flagship cameras, including its cloud connected HERO12 Black, HERO11 Black, HERO11 Black Mini, HERO10 Black, HERO10 Black Bones, HERO9 Black, and MAX cameras.

Recent Business and Financial Updates

• Financial Performance Overview: In the second quarter of 2024, GoPro achieved a revenue of USD 186 million, surpassing the company's guidance. Brian McGee, Chief Financial Officer and Chief Operating Officer, noted that despite this strong revenue performance, the cash balance remained stable sequentially. This stability was due to a deliberate reduction in inventory in preparation for the forthcoming launch of two innovative products scheduled for September.
• Product Launch and Innovations: Looking ahead, Nicholas Woodman, Founder and Chief Executive Officer, announced the upcoming launch of GoPro's new product lineup. This includes the HERO13 Black, a significantly upgraded flagship camera, and a new entry-level HERO camera priced at USD 199. The latter features a completely redesigned form factor, aimed at impressing both new and existing customers.
• Revenue and Subscriber Metrics: For Q2 2024, GoPro reported a 23% decline in total revenue compared to the previous year. Subscription and service revenue, however, rose by 8% year-over-year to USD 26 million, driven by enhanced retention rates and a 4% increase in average revenue per user (ARPU). The total number of subscribers grew by 4%, reaching 2.53 million by the end of the quarter.
• Retail and E-Commerce Performance: Revenue from retail channels amounted to USD 137 million, representing 74% of total revenue, which is a 17% decrease from the previous year. Meanwhile, GoPro.com revenue, including subscriptions and services, totaled USD 49 million, or 26% of total revenue, reflecting a significant 35% decline year-over-year.
• Financial Losses and Margins: The company reported a GAAP net loss of USD 48 million, translating to a USD 0.31 loss per share, compared to a net loss of USD 17 million or USD 0.11 loss per share in the same period last year. Non-GAAP net loss was USD 36 million, or USD 0.24 per share, versus a non-GAAP net loss of USD 8 million, or USD 0.05 per share, in the previous year. Gross margins were 30.5% (GAAP) and 30.7% (non-GAAP), down from 31.4% and 31.6% respectively, in the prior year.
• Operational and Strategic Initiatives: In recent business developments, GoPro formed a partnership with SoftBank Group's SB C&S Corporation in July to expand distribution in Japan. Additionally, the company launched a major merchandising and sales initiative with Best Buy, which includes new product displays and a comprehensive sales program. The company also marked a significant milestone by surpassing 50 million cameras sold since the 2009 debut of the HD HERO camera.
• Recognition and Sustainability Efforts: GoPro received recognition in various categories of the U.S. News & World Report's 2024 – 2025 'Best Companies to Work For' rankings in June. The company also published its 2024 Sustainability Report, outlining its progress in reducing carbon emissions, supporting employees, and upholding corporate values. Furthermore, GoPro cameras played a notable role in the production of the summer blockbuster film Twisters, collaborating with Universal Pictures, Warner Bros. Pictures, and Amblin Entertainment.

Technical Observation (on the daily chart):

The Relative Strength Index (RSI) over a 14-day period stands at a value of 46.35, currently recovering from oversold zone, with expectations of a consolidation or an upward momentum from the current support levels of USD 1.10- USD 1.20. The stock's current positioning is below both the 50-period SMA and 200-period SMA, which may serve as dynamic short to medium-term resistance levels.

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Speculative Buy’ rating has been given to GoPro, Inc. (NASDAQ: GPRO) at the closing market price of USD 1.28 as of September 25, 2024. 

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is September 25, 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level that the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the New York Stock Exchange (NYSE), NASDAQ Capital Markets (NASDAQ), and or REFINITIV. Typically, all sources (NYSE, NASDAQ, or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.