Hero: The Reason Behind GoPro's Bounce Back?

One of the best things that can happen to a consumer electronics company during holiday season is witnessing its product be sold-out as soon as it lands at a store. That is what GoPro Inc GPRO is experiencing now with its Hero camera, which is hard to be found from physical stores and e-retail websites.

Michael Pachter from Wedbush Securities, which has a price target of $98 for GoPro, was on CNBC recently to discuss the outlook for GoPro and the sales of Hero.

Related Link: Analysts Go Cold On GoPro

Stock Bouncing Back?

"I think that our channel check note got investors looking at it again and clearly it’s expensive," Pachter said. "I mean, it’s trading at 40 or 50 times next year consensus estimate and I think, people take that as very rich, but I think that earnings growth is going to justify that kind of a multiple and that kind of premium. I think you are seeing camera sales just way above their guidance. I don’t think that back in October when they gave guidance they anticipated that they would sell out consistently."

Sales Of Hero

He continued, "I checked [Monday] morning, the Hero is still not available anywhere. Best Buy says it’s available for in-store pick-up in and the nearest store to my zip code is 400 miles away. So, Best Buy has literally handful of them, Target has none, Wal-Mart has none. So that low priced camera is selling out, the medium-priced camera is selling very well, limited inventory. The expensive one is still in stock, but I think with giant camera sales we are seeing giant accessory attach rates and I think these guys are just going to crush it in December and I think have a very good March quarter as well."