GoPro Has 35% Upside: Cowen
In a research published Thursday, Cowen analyst Robert W. Stone initiated coverage of GoPro Inc (NASDAQ: GPRO) with an Outperform rating and price target of $76.
"We believe GPRO is not only a market leader, but actively expanding the category it created, with a range of devices that should appeal to sports enthusiasts and families," Stone stated, while adding, "Forthcoming new software should drive ease of use, while content licensing, drones and virtual reality help support L-T growth."
The analyst expects the company to deliver over 21 percent sales and EPS CAGR until 2019, with a cumulative 64 million units being shipped by year-end 2019. The US is expected to account for 45 percent of GoPro's total global users.
Related Link: Citi Upgrades GoPro In 30-Page Report
According to the Cowen report, "Rather than discounting its flagship brand, GPRO offers five cameras, $129.99 to $499.99, distinguished by resolution and other features. Two mid-range units feature touch displays for ease of use, while the newest Hero4 Session model is 50% smaller and 40% lighter to go anywhere and use anytime."
In 1H15, distribution had reached across 40,000 stores, with POP display units rising 40 percent year-on-year.
"Professional content brings viewers new perspectives on sports, and to new places. As with athletic apparel and shoes, we believe association with pro athletes drives brand loyalty," Stone said, while explaining that user generated content also helps to leverage social media and audience migration trends.
To be able to reach more users, it is important for videos to be easy to manage, edit and share, and GoPro intends to offer a new unified content licensing platform. The analyst also expects the drone launch schedule for 1H16 to drive revenue.
"We believe VR is an underappreciated driver. New third party VR headgear and services should drive interest in immersive content," Stone added.
Latest Ratings for GPRO
|Jan 2017||Longbow Research||Downgrades||Neutral||Underperform|
|Nov 2016||Raymond James||Downgrades||Outperform||Market Perform|
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