Oppenheimer Bearish On GoPro, But Why?

Action camera company, GoPro’s (NASDAQ: GPRO) easy to use high-definition cameras gained popularity among extreme sports athletes when it first launched in 2004. GoPros soon became the “must-have” action camera throughout the general public after the company released its IPO starting at $24 per share in June of 2014.

GoPro shares reached a 52-week high of $98 in October, but quickly came back down, last closing at $50.09 on May 18.

Oppenheimer analyst Andrew Uerkwitz is not so optimistic on GoPro, believing that company sales reached its peak five years ago. Although the analyst upgraded his rating on GoPro from Underperform to Market Perform on May 18, Uerkwitz stated that his negative long-term view on the company is “stronger than ever.” His upgrade on the stock stems from GoPro’s growth potential in Europe and Asia.

Uerkwitz is also under the impression that smartphone cameras will replace action cameras, stating “Consumers prefer smartphones to standalone cameras.” He added, “There is a growth spurt in the near term as the company finds first-time buyers… But eventually, growth will cave under pressure from more convenient devices such as the smartphone.”

Additionally, the analyst believes GoPro is “seriously lagging in terms of software, services, and technological capabilities.”

Uerkwitz has rated GoPro three times this year so far. On January 8, he maintained an Underperform rating on the stock and closed his position on January 21, earning a +19.4% return on his recommendation.

On January 21, he reiterated an Underperform rating and closed his position on March 2, earning a +25.9 percent return.

Uerkwitz maintained his Underperform rating on Go Pro for a third time on March 2 and closed his position on May 18 when he upgraded to Market Perform, earning a -21.9 percent loss on his recommendation.

Overall, Andrew Uerkwitz has rated GoPro seven times since October 2014, earning a 67 percent success rate recommending the action camera company and a +11.8 percent average return per recommendation.

On average, Andrew Uerkwitz has a 61 percent success rate recommending stocks and a +5.0 percent average return per recommendation.