Pacific Crest Says 'Avoid GoPro At Current Levels'

Pacific Crest Securities commented on channel checks for GoPro Inc GPRO Wednesday.

Analyst Brad Erickson noted that "checks indicate that demand for the Hero 4 Silver appears slightly stronger than the Black Edition camera, with more Black inventory versus Silver after the first three weeks of sales.

"Further, we believe early demand for the low-end Hero may be a bit light of expectations, which may be due to the lack of connectivity. Overall, high-end sell-through appears relatively in line thus far; however, we have found few stock outages in big box channels in the United States.

"We expect solid Q4 guidance on the back of new product channel fill, which appears front-end loaded toward the high end. However, we continue to believe it is unlikely GoPro will see the upside to hardware revenue necessary to warrant a stock price above our fair value target," according to the report.

Erickson concluded that his "fair value target [of $73] is generous for both hardware and media monetization opportunities. If guidance is anything but stellar, we believe investors could quickly assign the company significantly less credit around these future opportunities."

The report indicated that investors should "avoid GPRO at current levels."

The firm maintained a Sector Perform rating.

GoPro Inc recently traded at $68.54, down 1 percent