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Analyst: GoPro Investors Shouldn't Be Concerned About Competition From Google

Analyst: GoPro Investors Shouldn't Be Concerned About Competition From Google

Contrary to various reports, Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL)'s newly introduced camera isn't a competitive threat to GoPro Inc (NASDAQ: GPRO), at least according to JPMorgan's Paul Coster.

Alphabet's Google unit announced this week a smart video camera called Google Clips that sent shares of GoPro lower by more than 13 percent. But the reality is Google's new camera isn't intended to address the same market GoPro targets.

Google's new product isn't designed as a point of view camera, nor is it wearable and rugged, the analyst commented in a report. The camera also lacks sound, image stabilization, high frame-rate and many other features that GoPro customers demand.

In fact, the Google Clip is intended to address only a subset of the needs of the smart-home market which implies that GoPro's selloff is "over-done," Coster continued. Granted, there will be minor overlaps between the Clip and GoPro's cheapest camera.

Despite the lack of any direct competitive threat, GoPro's stock could have fallen as investors are assuming the longer-term implication of Google entering the camera market for the first time, the analyst added. For example, the Google camera boasts machine learning technology and integrates very well with social media platforms -- two features that "should worry GoPro investors."

Nevertheless, in its current form, Google's camera "doesn't seem any more advanced" than GoPro's features and cloud-hosted platform. Also, talking with GoPro's management team gave the sense that it will be adding its own artificial intelligence features in its cameras soon.

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Latest Ratings for GPRO

Nov 2020Morgan StanleyMaintainsUnderweight
Aug 2020Morgan StanleyMaintainsUnderweight
May 2020WedbushMaintainsNeutral

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