GoPro’s Quarterly Results Beat Wall Street Projections -- Earnings Review

May 3, 2018

GoPro Inc. (GPRO) reported first-quarter results on Thursday. Here’s what you need to know:

EARNINGS: GoPro narrowed its net loss to $76.3 million, or 55 cents a share, from $111.2 million, or 78 cents a share, a year earlier. Excluding stock-based compensation and other items, the loss was 34 cents a share, compared with 44 cents a share a year earlier. Analysts surveyed by Thomson Reuters projected an adjusted loss of 37 cents a share.

REVENUE: Revenue fell 7% to $202.3 million, compared with the consensus forecast of $184.2 million.

MARGIN: Gross profit margin narrowed to 22.2% from 31.4% a year earlier.

COMMENTARY: “Our first quarter was driven by strong sell-through of HERO5 Black and HERO6 Black, along with the launch of our new $199 entry-level HERO,” founder and Chief Executive Nicholas Woodman said in a statement, adding: “Our first quarter performance makes it clear that there is significant demand for GoPro, at the right price. We began to step up marketing programs in March which, coupled with overall expense controls, solid channel management and second half new product launches, gives us confidence for a successful 2018 for GoPro.”

GoPro: For CEO Nick Woodman, It’s Been a ‘Journey’

July 30, 2018

GoPro (GPRO) was one of 2014’s hottest IPOs, is shares rising some 130% in the months after its May listing. Since then, they’ve given up all of those gains — and much more.

The reason: The company’s growth story fell apart. Revenues in 2017 were the lowest since 2013, and GoPro has been in the red since 2015. The shares closed last week at around $6; their post IPO-high was near $94.

This year started with the January announcement of more than 250 job cuts, bringing the company’s head count below 1,000, and the demise of the Karma drone line.

Since then, the company has reworked its Plus subscription service, which includes unlimited photo storage and “no questions asked” replacement cameras; launched a $199 entry-level Hero camera and a “trade-up” program for older models; and announced a feature that lets users share content directly to Facebook’s (FB) Instagram.

It also updated the software on the $699 Fusion camera, a 360-degree recording device that illustrates how the company believes its higher-end cameras can be a kind of laboratory for future products even as the $199, $299 and $399 price points continue to represent its core offering.

The effects of GoPro’s efforts remain to be seen. In May, the company reported first-quarter financial results that showed revenue falling year-over-year but unit sales ticking upward—a sign, the company believes, that consumers like its offerings.

The company is scheduled to announce second-quarter financial results on August 2; Wall Street expects a net loss of $0.22 per share on revenue of $270 million, according to FactSet, with both estimates below year-ago levels.

The second half is generally more important to GoPro; this year, especially the fourth quarter, should be particularly so, with the company planning a revamp of its core product line for the first time in roughly half a decade. Wall Street predicts year-over-year revenue growth in Q4.

Woodman says better manufacturing and sourcing should make the new models more profitable while offering consumers the same value.

And GoPro is now plumbing its historic sales data for insights about consumer desires and buying behaviors, and more strategic—and, perhaps, frequent—refreshes of GoPro’s product and price lineup are likely, according to Woodman.

“You need new products every year,” he said. “And If you leave a product out, you have to discount that product by $100 if you want to drive sales.”

Investors remain wary. GoPro’s shares are off some 17% in 2018, underperforming the S&P 500. The mean share price target is currently at $5.54, according to FactSet, about 10% below current levels; none of the analysts covering the company have “buy” recommendations on the stock.

Some investors may be holding out hope that GoPro is acquired, which Woodman has said the company would consider. Lately, however, it’s been pretty quiet on the merger rumor front. GoPro’s outward focus is on its products—earlier this month, it said it sold its 30 millionth HD camera in the second quarter—and, for Woodman, on its process.

GoPro CEO: Get Ready for ‘a Full Year of Profitability’

Aug. 2, 2018

GoPro (GPRO) is plotting a course for a profitable second half and year ahead, with the camera company banking on a refresh of its product and pricing strategy to help it end a difficult period in its post-IPO history.

The Barron’s Next 50 company reported Q2 financial results after the market’s close Thursday, turning in revenue of $283 million and a non-GAAP net loss of $0.15 per share. Both of those numbers beat Wall Street’s consensus expectations, according to FactSet data.

With GoPro planning a refresh of its core product line—its $199, $299 and $399 cameras—in the second half, CEO Nick Woodman says the company has figured out how to avoid more periods like last year’s disastrous Q4.

“What’s probably most concerning to investors heading into this fourth quarter is execution,” Woodman said in an interview with Barron’s Next. “That’s understandable given the past couple of years.”

The difference now, Woodman said, is that the company understands it can’t go through its key selling season without either launching important new products or discounting old ones. The company hasn’t announced timing or other details of its new launches, but previous second-half product introductions have come in late Q3.

“Users want to see either significant price reductions or new product launches to compel them to purchase,” Woodman said. “Understanding this, we will not leave older flagship products out there at the original price—and we are very focused on launching new products at each holiday season.”

With the new products—which Woodman has said will be more profitable while still offering more value to buyers—“we’ll have significantly improved our margin profile.”

Lower inventory levels, meanwhile, mean more of the old stuff will be gone by the end of the year, according to the company.

“We’ve spent the last couple of years learning about the pricing sensitivity of our products and our customers’ interests,” he told Barron’s next. “It’s taken two years to go through a recovery period to position GoPro for a full year of profitability.”

GoPro investors nervous that component shortage will hurt sales in holiday quarter

Aug. 2, 2018

During the company’s call with analysts Thursday, its stock went on a roller-coaster ride in after-hours trading, sinking about 5% at one point, but ultimately rose around 5% by the end of the call. GoPro executives said a component shortage of resistors and capacitors could hamper its ability to meet all the demand it has for its new product lineup in the holiday quarter. GoPro said it believes it will sell about 4.2 million cameras in 2018, while it has demand for about 5 million.

“The combination of all products through the year within the total demand on the sell-through basis is about 5 million units,” said Brian McGee, GoPro’s chief financial officer. “Our ability to supply, at the moment, we think is limited to 4.2 [million] with hopefully some upside.”

“GoPro does not have a demand problem, full stop,” GoPro founder and Chief Executive Nick Woodman told analysts on the call. “It really comes down to pulling in the supply of some of these components so that we can build them early enough in Q4 and recognize them as sell-in revenue to potentially recognize the upside that our current demand is showing exists.”

Woodman said that since GoPro decided to discontinue its Hero Session camera earlier this year and focus on its Hero form factor, customers are responding well. “We had a gap at the $199 price point,” he said. “The customer really wants a Hero camera more than they want a Session camera....It has not cannabilized the higher-priced GoPros as was a concern to some investors.”

GoPro said that due to the dynamic supply situation, sales in the second half of 2018 may fluctuate depending on the timing of the supply.

The company has tried unsuccessfully to expand beyond its Hero camera line, including a failed effort in creating a media business with a GoPro video channel and its drone debacle. It also has had problematic product launches. Now, by focusing on its core lineup, it seems to be embracing its status as a one-trick pony. Whether that will be enough for investors is a question for the future. For now, the focus will be on how much of the current demand can GoPro meet, or if the component shortage will cause it to lose possible sales.

GoPro's stock surges after Oppenheimer says it is time to buy

Published: Sept 26, 2018 7:59 a.m. ET

Shares of GoPro Inc. shot up 5% in premarket trade Wednesday, after Oppenheimer analyst Andrew Uerkwitz turned bullish on the action camera maker, citing optimism surrounding new product launches and a new focused strategy. Uerkwitz raised his rating to outperform from perform, and issued a stock price target of $9, which is 36% above Tuesday's closing price of $6.62, and would be the highest price seen since November 2017.

The company unveiled last week its new Hero7 family of cameras. "With compelling features such as live streaming and gimbal-like image stabilization, we believe the products are compelling," Uerkwitz wrote in a note to clients. He said the products should be enhanced by targeted marketing and a "vastly improved" software editing suite. "In summary, overlooked GoPro should be a buy," Uerkwitz wrote. The stock had slumped 13% year to date through Tuesday.