GoPro Sees Worst Trading Day In Company History Despite Q3 Beat

GoPro Inc GPRO shares were headed for their worst single-day drop on record Friday despite reporting a third-quarter earnings beat.

The company reported Q3 adjusted earnings per share of negative 4 cents, beating estimates by 2 cents. Sales came in at $285.936 million, beating estimates by $13.7 million.

Wedbush Sees Opening For Stock Rebound

Wedbush analyst Michael Pachter maintains a Neutral rating on the company with a $7 price target.

Improved execution and granular guidance gives Pachter more confidence after two years of generally poor execution, he said in a note. Shares likely fell after management failed to pass Q3 upside to full-year guidance, the analyst said. 

“Should GoPro execute and surpass its full-year and [first quarter] guidance, it will likely regain investor confidence." 

A Cautious Holiday Outlook 

Bank of America Merrill Lynch analyst Ryan Goodman maintains an Underperform rating with a $5.75 price target.

GoPro remains a show-me stock, and holiday execution will be key, the analyst said. 

“Channel inventory seems okay, and legacy should clear out by end of month. However, given the recent holiday track record and early potential flags, we approach the holidays with a cautious bias,” Goodman said. 

Morgan Stanley Says GoPro Needs Strong Finish To 2018 

Morgan Stanley analyst Yuuji Anderson maintains an Underweight on GoPro with a $5 price target.

Fourth-quarter and first-quarter estimates remain at risk, and GoPro stock is vulnerable without accelerated improvements to finish the year, the analyst said. 

“Plans to step up promotional activity for the Silver and White highlight our concern over mid- and low-end camera demand heading into the holidays,” she said. 

“Inventory exiting the year will be a key indicator for GoPro’s recovery, and we remain skeptical on the recovery trajectory given the historical pace of functional improvements to the camera ecosystem and consumer receptivity."

Price Action:

GoPro shares were down 24.79 percent at $5.40 before the close Friday. 

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Public domain photo via Wikimedia.