Longbow Says GoPro Should Have A 'Positive' Q1

Action camera maker GoPro Inc GPRO is scheduled to report first-quarter results in early May and Longbow's first-hand checks point to a "positive" report.

The Analyst

Longbow Research's Nikolay Todorov maintains a Neutral rating on GoPro.

The Thesis

GoPro launched its HERO7 Black camera in late September and Longbow's checks point to that camera accounting for around 65 percent of total first-quarter sales, according to Todorov. Consumer interest for the H7B is 59 percent higher compared to last year's HERO6.

Todorov says the new camera's compelling features such as the elimination of shaky video helped support an average selling price increase of 8 percent from last year to $289. The momentum looks to be sustainable through the second quarter and management could implement a 9-percent average selling price increase.

The H7B's momentum is partially offset by the H7 Silver model, which experienced elevated levels of inventory at some merchants. This was likely the case at Amazon where the online retailer has been running a $100 off promotion since mid-March.

Todorov says a neutral stance on GoPro's stock remains appropriate due to a shrinking total addressable market and a questionable unit sales growth outlook.

Price Action

GoPro's stock traded around $6.64 per share at time of publication Tuesday afternoon.

Related Links:

Analysts See Blurry Longterm Picture For GoPro Despite Profitable Quarter

Analyst: GoPro's New HERO7 Unlikely To Save The Day