GoPro's Last 5 Days Could Be Bigger Than IPO, Oppenheimer Says

In a report published Tuesday, Oppenheimer analyst Andrew Uerkwitz maintained a Perform rating on GoPro Inc GPRO, after CEO Nick Woodman announced that the company would build a drone by 2016, marking its entry into the Virtual Reality market with a spherical array, having 6 cameras, as well as a cylinder array, having 16 cameras.

GoPro has also announced an updated mid-level camera, namely the Hero+LCD, which replaces the Hero 3 Silver. Analyst Andrew Uerkwitz said that the company has "made it clear" that it is a prosumer device company and "has work left to do to capture the larger consumer market."

In the report Oppenheimer noted two things that happen with the company's foray into the VR market:

• "Heads off the competition more quickly (vs. drone market) as competitors are still very new"
• "Validates GPRO's capture quality"

Both these factors are critical to GoPro's brand and reaches across the other segments. "New verticals and renewed investor enthusiasm make our worries irrelevant in the near term," Uerkwitz stated.

Uerkwitz added, however, that GPRO may not be able to develop a drone by itself. "We believe making drones requires expertise in flight control and sensor fusion that GPRO may not have. If it were to have a partnership, we'd be much more keen on the immediate opportunity."

"Adding two verticals that solidify its prosumer credibility while tackling some of the mid-range camera shortfalls - GoPro over the course of 5 days may have reset its course," the report mentioned.