GoPro, Inc. (NASDAQ: GPRO)
Shares of GPRO are spiking higher in today’s session by over 6% on an upgrade out of Barclays along with a boosted price target of $65.
Barclays analyst Joseph Wolf upgraded GPRO to overweight from equal-weight.
Analysts’ Note On GoPro, Inc.
“We upgrade GPRO to OW and raise our PT to $65 as solid execution, new
products, acquisitions, external hires, and continued brand strength turn our
skepticism into optimism. Our previous EW rating was based on valuation, hardware commoditization and margin compression, execution, addressable market, and media monetization. Since the IPO the company’s progress has reduced our concerns considerably. GPRO created its device category and share
loss is at the low end. We were skeptical on mix and margins as units grew and the customer base expanded, but GM has improved to 45% in 1Q15 from 42% in 2Q14 and the high-end devices remain the best sellers. Strong execution since the IPO with the intro of the Hero4 and the compact Session solidify the hardware lead. New developments like 360 video, drones, better software, and a planned a portal should further expand the lead. With hardware numbers up and the stock down our concerns about media contribution have faded. Recent hires of Zander Lurie (CBS and Guggenheim Media) and Charlotte Koh (Hulu) highlight a focus on content that when combined with a GPRO portal and better editing and production tools could produce an interesting avenue for brand extension for GPRO,” according to the Barclays report published Tuesday.
GPRO Technical Analysis
GPRO presented a great opportunity for a long trade on the upgrade news as the daily chart was correctly positioned. GPRO had daily price action support from June 30 at 54.11 and then a large gap straight to 57.05 with a daily Average True Range (ATR) of 2.11. The gap qualifies as a relevant tradeable zone because the gap encompasses the daily ATR; critical for a strong move.
As the market opened, the price dipped down below $54 and quickly reclaimed the $54.11 level with strong volume which signified a bullish sentiment triggered a trade to the long side.
GoPro, Inc. develops hardware and software solutions to alleviate consumer pain points associated with capturing, managing, sharing, and enjoying engaging content. The company offers HERO line of capture devices, such as cameras; premium accessories, including battery BacPac, smart remote, and LCD touch BacPac accessories; and mounts comprising equipment-based mounts consisting of helmet, handlebar, roll bar, and grip and tripod mounts that enable consumers to capture content while engaged in a range of activities, as well as mounts that enable customers to wear the mount on their bodies, such as wrist housings, chest harnesses, and head straps. It also provides other accessories that include spare batteries, charging accessories, cables to connect its GoPro cameras to televisions and monitors, video transmitters, external microphones, flotation devices, dive filters, and anti-fogging solutions, as well as accessories for the smart remotes. Yahoo! Finance