Goldman Is Bearish On GoPro Heading Into Earnings

GoPro Inc GPRO saw a huge 19 percent surge in its stock price on Wednesday. Some traders attributed the move to positive comments out of Cleveland Research, while others touted the company's hiring of Danny Coster as VP of Design.

However, one firm is bearish on the action-camera maker.

In a note out Wednesday morning, Goldman Sachs laid out its risks for the company heading into its latest earnings report.

"Lack of new products and reduced product SKUs pose risks to estimates," the note said. "[D]rone launch at a critical stage – We see downside to 1Q revenues driven by muted end demand, a lack of new products, and price erosion."

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The firm models revenues at $163 million, which is at the low of end of the company's $160-$180 million guidance and 3 percent below the Street's $169 million estimate.

"We expect a loss of ($0.63) vs. the Street at ($0.59) on lower gross margins and higher opex," Goldman continued. "We see a modest contribution from the drone launch toward end 2Q, but we think any delay would adversely impact the stock and represent a headwind to our current estimates."

Goldman Sachs' four biggest risks: Product execution, competition, commoditization and content monetization.

The firm holds a Neutral rating and $11 price target on the stock.

Shares closed Wednesday at $13.90, up 19 percent on the day.