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Apple: FBR Sees ‘Critical Juncture’ to Consider Large Deals Such as GoPro, Tesla, Adobe
FBR & Co.’s Daniel Ives this morning reiterates an Outperform rating, and a $175 price target, arguing the company has come to a “critical juncture” in its development where it should consider making a large acquisition, perhaps buying GoPro (GPRO), Adobe Systems (ADBE), Box (BOX), or even Tesla (TSLA).
Writes Ives, “Apple and [CEO Tim Cook] are entering a critical juncture from a product, growth, and strategic perspective”:
While Apple has built its golden consumer empire around its unrivaled iPhone franchise, we believe Cook’s crystal ball is now focused on building out new technology growth frontiers/product areas for the next decade. While 2016 will be the year of the highly anticipated iPhone 7 release (potentially major design changes in store), and with the 6s growth continuing to be the major debate around the Apple story near term, in this note we take a look at potential M&A ideas that Apple could consider over the coming year. Although we clearly can see Cupertino focusing on a number of skunkworks initiatives (e.g., Project Titan, virtual reality-Faceshift, etc.) in 2016 and not pursuing major M&A prospects, with $200 billion of cash in the coffer (and growing), we can finally envision Apple making a larger acquisition, as the conditions are ripe for Cook to make a move, in our opinion.
GoPro would “make sense,” he thinks:
We believe an acquisition of GoPro would make sense for Apple ; action cameras are uniquely positioned at the intersection of Apple’s smartphone, wearables, and multimedia offerings. Additionally, GoPro’s new product cycles could open the door to areas where Apple’s competitors are investing heavily (e.g., drones, VR), and Cupertino has been playing catch-up. We also see strategic value in GoPro being integrated with Apple’s strong multimedia ecosystem (e.g., iTunes, Apple TV, etc.).
While Apple “will most likely slowly build out its auto R&D,” with the rumored “Project Titan,” writes Ives, “a Tesla deal would clearly accelerate this move.”
With Apple’s push into enterprise selling, as evinced by its partnership with IBM (IBM), Ives thinks Box and Adobe are good enterprise tech targets for Apple.
“Box would give Apple an avenue into enterprise storage and enable it to expand its product tentacles (hardware/storage) into the enterprise cloud frontier.”
“Adobe would provide a nice pipeline into the enterprise,” he thinks, as “Adobe’s Document Cloud/ Marketing Cloud applications are helping enterprises grapple with the growth of digital marketing, proliferation of mobile devices in the enterprise, and IOT.”
GoPro sees revenue of $160 million to $180 million for the current quarter, and a gross profit margin of 35% to 37%. That is substantially below the $291 million the Street has been modeling.
For the full year, it sees revenue of $1.35 billion to $1.5 billion, well below consensus for $1.609 billion.
GoPro also said it named former Qualcomm executive Brian McGee its new chief financial officer, replacing Jack Lazar.
It has the same problem that it had on page 1, it's an overvalued camera company. They failed to monetize the content being produced by the cameras. Youtube and Facebook benefits more from GoPro cameras than GoPro does.
Breaking below $10 is a huge problem. Institutions have problems buying such cheap stocks and generally won't. The one positive I see for the stock is its HIGH short percentage @ 44% (yahoo finance)- eventually shorts will need to cover. Unfortunately, covering might not happen until $5 or if another company simply buys it. I like the Price/Sales at .8 and 32% ROE- those are some strong numbers from a fundamental viewpoint.
All because they reportedly hired an Apple designer? Didn't know GoPro had a design problem. I thought it was because their products are commoditized and aren't selling as much.
Shares of GoPro surged 13% Wednesday after the company reportedly hired a designer from Apple Inc. The Information reported that the action-camera company had hired Danny Coster, who has worked for Apple on the company's iPhone and iPad. Shares of GoPro have gained 10.5% month-to-date, compared to the S&P 500's gain of 1%.
GoPro Names Apple Designer Daniel Coster to Design Team
Daniel Coster will start as vice president of design at April’s end
GoPro Inc. said it has poached a member of Apple’s design team, contributing to a rally in shares of the wearable-camera maker on Wednesday.
Daniel Coster, who is reportedly credited with contributing to the iPhone’s design and the iPad’s wireless keyboard among other products, will begin his new post as vice president of design at GoPro at month’s end.
Shares of GoPro, which have slumped 69% over the past 12 months, jumped 19% to $13.92 in afternoon trading. Shares of other struggling tech companies, such as Fitbit Inc., up 12%, and Yelp Inc., up 4.4%, rallied Wednesday.
The company said that in his role, Mr. Coster will have a hand in all aspects of design, from hardware to software to services.
GoPro described Mr. Coster as a “core member of Apple’s elite industrial design team for more than 20 years” and added that he “holds more than 500 design patents and several utility patents, and has been recognized by several international design organizations for his work.”
The hire was a shot in the arm for struggling GoPro, which in February posted weak fourth-quarter earnings, extending its rough ride of recent results. The company in January announced a 7% reduction of its workforce, and last year a 50% price cut to its newest camera.
Analysts say GoPro faces challenges because the action-camera market is becoming saturated and the company is struggling to find new sources of revenue.
Options suggest a 15% move up or down. I'm thinking down.
Analyst expectations:
- loss of 59 cents per share. Had a profit of 24 cents per share a year ago
- revenue of $169 million. Revenue was $363 million a year ago
Options suggest a 15% move up or down. I'm thinking down.
Analyst expectations:
- loss of 59 cents per share. Had a profit of 24 cents per share a year ago
- revenue of $169 million. Revenue was $363 million a year ago
Those are HUGE year over year declines.
Originally Posted by AZuser
F it. Picked up some May 20 $9.50 puts for a small gamble.
With my luck, this means GPRO is going to go up.
After Hours : $11.70 - Up $0.99 (9.24%) 4:19PM EDT
Reports loss of 63 cents vs loss of 60 cents EST
Revenue of $183.5 million vs $169 million EST
Margins fell to 33% from 45% a year ago.
Giving back gains. Come on. Give it all back.
After Hours : $11.35 - Up $0.64 (5.98%) 4:21PM EDT
Keep going.
After Hours : $11.10 - Up $0.39 (3.64%) 4:22PM EDT
12-10-2015, 12:52 PM
; action cameras are uniquely positioned at the intersection of Apple’s smartphone, wearables, and multimedia offerings. Additionally, GoPro’s new product cycles could open the door to areas where Apple’s competitors are investing heavily (e.g., drones, VR), and Cupertino has been playing catch-up. We also see strategic value in GoPro being integrated with Apple’s strong multimedia ecosystem (e.g., iTunes, Apple TV, etc.).
Should have been 
?
