GoPro Inc GPRO has reached an "attractive entry point," said a new note from Dougherty & Company LLC. With shares trading at just 20x the 2017 EPS estimate, Dougherty said it is time to get into "one of the most valuable brands in consumer technology." The analysts slapped a $55 price target on the stock, a more than 26 percent increase from current price at $43.50.
The analysts pointed to global expansion as a path to GoPro's growth in new device categories. Further, the near-term expectations are "beatable," if any conclusion can be drawn from supplier Ambarella Inc AMBA. And, taking a contrarian view on Xiaomi, the analysts said that the $64 competitor could be good for GoPro in that it stimulates demand in China – warming the market for the clear best of breed.
Additional factors that could contribute to growth: (1) the fact that estimates assume no new "adjacent" product categories; (2) the lockup expiration focus is in the past; and (3) GoPro app downloads have reversed their downtrend.
Dougherty accompanied the note with an upgrade from Neutral to Buy. GoPro recently traded at $43.50, up more than 1.5 percent today.
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