GoPro Inc GPRO on Thursday reported a strong third quarter result coupled with an even stronger guidance. However, Andrew Uerkwitz of Oppenheimer noted that the company's fourth quarter sales, which include the holiday season, aren't as important as many investors assume it is.
"Most investors we spoke with agree that the holiday season looks very strong," Uerkwitz wrote in a note to clients on Friday. "Our contention is that what happens in 2015-2016 matters more."
Uerkwitz expects GoPro's growth rates will decelerate "rapidly" through 2016 with limited expansion of its total addressable market. In fact, the analyst expects GoPro will see growing competition next year.
According to Uerkwitz, GoPro's product line, including HERO4 Silver, will be one of the best-selling consumer electronic gadgets for the coming holiday season. However, the analyst remains unconvinced the company can properly monetize its media content. For now, GoPro's user generated videos are "powerful marketing tools" and also "negligible revenue sources."
Shares are Underperform rated with a $45 price target.
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