GoPro Inc (NASDAQ: GPRO)
On Wednesday, October 28th, after the market closed, GoPro, the developer of cameras used to capture active and engaging content, reported disappointing revenue and earnings for the third quarter ended September 2015. The company also lowered guidance for the fourth quarter of 2015.
GPRO Earnings and Outlook
Revenue for the quarter grew 43% year over year to $400.34 million but missed analyst’s consensus estimate of $431.48 million. Non-GAAP income increased 108.3% to $0.25 per share, but again fell below the consensus estimate of $0.29 per share. GoPro also lowered fourth quarter revenue guidance to $500-$550 million from consensus of $680 million, and income guidance to $0.35-$0.45 per share compared to consensus of $0.81 per share. The company did highlight some positive product launches and operating metrics, and also announced plans to repurchase up to $300 million of its stock during the fourth quarter. Yahoo Finance
“I am proud of our year-to-date accomplishments in which we posted strong financial results and expanded our portfolio of products, however our business in the third quarter was clearly more difficult than anticipated,” said GoPro Founder and CEO, Nicholas Woodman. “GoPro is entering the holidays with an industry-leading lineup backed by great software solutions and a globally-recognized brand. We are excited about our business and the investments we continue to make to scale GoPro into its next phase as a product, software and entertainment company.” Benzinga
GPRO Technical Analysis
GoPro went public in June 2014 at $28.65 and enjoyed the bullish surge typical of a momentum growth stock, reaching an all time high of $98.47 in less than four months. However, it also took less than four months for the share price to be cut in half as the market questioned the company’s growth potential. The stock has been in a downtrend since early August and dipped below its IPO price, hitting all-time lows of $27.07 in October.
Wednesday’s disappointing earnings report provided a fresh bearish catalyst and the stock hit a new all-time low of $24.30 in pre-market trading on Thursday. Buyers did step in during the day and rallied the price to a high of $26.35 before closing the day at $25.62. On Friday, GPRO traded in a tight range between $25 – $25.35 for most of the day on lighter volume. The stock closed below VWAP and short term moving averages at $25.
On the long side, GPRO must regain the important support level of $25.05 and get through, and stay above resistance at $25.65. If buyers do step in, there should be more resistance between $26-$26.20. On the bearish side, a hold below $25.05 could lead back to and possibly through the lows of $24.30.
About GoPro, Inc.
GoPro, Inc. produces mountable and wearable cameras and accessories, which the Company refers to as capture devices. Additionally, the Company develops and provides desktop editing software and mobile applications for free to consumers. The Company offers HERO line of capture devices, which include HERO2, HERO3 camera, the HERO3+ camera and the HERO4 and HERO. The Company also provides a selection of mounts designed to enable consumers to capture content while engaged in a range of activities. This includes equipment-based mounts, such as the helmet, handlebar, roll bar, as well as grip and tripod mounts. The Company also offers two software applications: GoPro Studio and GoPro App. GoPro Studio is a video editing tool that allows users to create videos from their GoPro content. The GoPro App allows users to control their GoPro cameras remotely using a smartphone or tablet. Its capture devices are sold through retailers, wholesale distributors and on the Company’s Website. Google Finance