Market Overview

Citigroup: GoPro Could Be Left Out In 'Social Cam' Shift


GoPro Inc (NASDAQ: GPRO) could get left behind in the point-of-view camera market in a shift to cheaper, wearable "social cams," an analyst said Friday.

Privately held Ion America LLC makes a "compelling case" for a pending market shift, Citigroup's Jeremy David said following a meeting with the company's managers.

Ion introduced a 1.5-inch square social cam in Las Vegas this week at the International Consumer Electronics Show. Called the SnapCam, the device is priced at $79 to $149.

Although Ion's current product line is dominated by action cams that compete directly with GoPro, it figures growth in the market for point-of-view cameras will be increasingly driven by wearable social cameras, a segment where GoPro currently offers nothing.

Ion believes the total market for wearable cameras will grow to 20 million to 25 million units annually within several years, from a current 8 million units.

Ion's Chief Executive Giovanni Tomaselli claims the company is able to introduce one new product every 90 days, according to David.

Although GoPro offers two-year compounded sales growth of 20 percent, its current share-price premium "is unsustainable in the long term" according to David, unless the company's results exceed forecasts.

Besides social cams, David said privately held Contour cameras may offer increasing competition in the action cam market, while Garmin Ltd. (NASDAQ: GRMN) is also poised to expand its offerings in the segment.

GoPro changed hands recently at $60.46, up 0.62 percent.

Latest Ratings for GPRO

Aug 2020Morgan StanleyMaintainsUnderweight
May 2020WedbushMaintainsNeutral
May 2020Morgan StanleyMaintainsUnderweight

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