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Cleveland Research Sees GoPro's Market Growing At 20-30% Annually

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Cleveland Research Sees GoPro's Market Growing At 20-30% Annually
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The action camera market may support several years of growth for GoPro Inc (NASDAQ: GPRO), and the company will see limited threats from lower-priced competition, an analyst said Monday.

The company, which recently launched a new mid-priced Hero + LC camera, changed hands recently at $60.30, up $0.89. Shares have gained more than 50 percent in the past three months.

Additional product tweaks, expected in the second half of 2015 and early 2016, will help GoPro beat volume estimates over the next 12 months, according to Cleveland Research's Benjamin J. Bollin.

The analyst expects growth in the action camera category in the 20 percent to 30 percent range "for the next several years," with additional opportunity for GoPro emerging in the market for consumer drone products.

GoPro posted first quarter revenue growth of 54 percent.

Related Link: Will Apple's iPhone Replace GoPro?

"We see improving execution from the business with greater geographic diversification and product diversification," said Bollin, who predicted "upside to estimates in the next several years."

Bollin offered little detail on his view that lower-priced products won't threaten GoPro.

GoPro, which expects to launch a line of drones during the first half of 2016, will become "one of the largest players in the category within several years," in Bollin's view.

In 2016, GoPro might sell between 200,000 and 50,000 drone units, Bollin said.

Each 100,000 of drone shipments corresponds with $0.10 of additional earnings per share, according to Bollin, who estimates the drone units will be priced between $750 and $1,000.

Bollin predicted GoPro will post second quarter earnings of $0.27 a share on revenue of $411 million, versus the current consensus of $0.26 a share on sales of $395.25 million.

Bollin maintained a Buy rating and said he "sees upside to the $70" share-price level.

Analysts on average maintain an Overweight rating and a $68.58 price target on GoPro.

Latest Ratings for GPRO

DateFirmActionFromTo
Aug 2017Goldman SachsUpgradesSellNeutral
Aug 2017Raymond JamesUpgradesUnderperformMarket Perform
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Posted-In: Benjamin J. Bollin Cleveland ResearchAnalyst Color Reiteration Analyst Ratings Tech Best of Benzinga

 

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