What Can GoPro Do To Be Loved By You (Wall Street Analysts)?

• GoPro Inc GPRO shares have declined 79.25 percent over the past one year, almost down to their 52 week low on January 15, at $11.46.
• Oppenheimer’s Andrew Uerkwitz has maintained a Perform rating on the company.
• In order for the stock to be “loved,” Uerkwitz believes that the company needs a clear strategy and the ability to leverage the brand.

Analyst Andrew Uerkwitz believes that the negative bias towards the stock “comes from a view that the market is limited for action cameras and the company thus far has done little to break the limitation.”

Uerkwitz believes that the first thing GoPro needs to do is to determine what it really is, whether it is an entertainment or media firm, an action camera manufacturer or a content enabler.

“We believe the company has a clear target on its back as many companies work to become the "GoPro" of fill-in-the-blank whether this is drones, 360 capture, life logging, or content editing. Once GoPro realizes this, it should work faster to deliver on its promises,” Uerkwitz stated.

The capture market is expected to continue to shrink and bifurcate into professional or niche segments. GroPro at present has monopoly on the POV/action segment. However, as new markets emerge, Uerkwitz recommends that the company move quickly to enter these markets.

However, till there are “clearer signs of a sound strategy,” Uerkwitz prefers to remain on the sidelines.

The FY15 and FY16 revenue and EPS estimates have been reduced to reflect the lower guidance for FY15 and the lower margin and unit assumptions for FY16.