GoPro Shares Could Give Bulls A Nice Present For The Holidays
GoPro Inc (NASDAQ: GPRO) shares are the darling of the risk junkies and the plaything of many day traders.
Can the company's cool niche market create enough fundamental fire power to boost the stock through several layers of technical resistance that exist right now? Let's take a look.
What The Bulls See
- A bullish technical set-up (see below).
- Four percent net profit margins that spin off $110 million an positive levered free cash flow annually.
- Zero debt and $239 million in cash equivalents.
What The Bears See
- Very expensive valuation metrics: A price-to-book ratio of 26.8, a price-to-sales ratio of 8.51, a market capitalization of $9.71 billion that trumps the enterprise value of $9.31 billion and a PE of more than 60 versus estimated 2015 revenue and EPS growth of 23.7 percent and 22.8 percent, respectively.
The Technical Take
Technicians note that GoPro shares appear to be in the early stages of wave "c" of an "abc" upside correction that will comprise wave "B" of an "ABC" downside correction. That means the technicians are expecting a bit more upside (to the $89.20-$94 range) before another leg lower commences. That leg could take GoPro down to the $60 to $70 range.
Shares of GoPro traded recently at $79.05, up almost 6 percent.
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