GoPro: Tariff Proof, But This Upcoming Catalyst Is What Really Matters

Tariffs and the threat of tariffs between the United States and China contributed to a volatile August. Over the past month, the S&P 500 SPY is down almost 3%, but shares of GoPro GPRO have fallen 29% despite a statement from the company that impending tariffs will not impact second half financial results.

Last Monday, GoPro CFO Brian McGee reiterated, "As previously stated, we began production in Guadalajara, Mexico of our U.S. bound cameras in June to support sales beginning in the third quarter of 2019."

Regardless, an earnings report, which showed lower than expected second quarter EPS and revenue results, sent shares of the stock tumbling at the beginning of the month.

Looking Forward

At the beginning of Aug., Wedbush analyst Michael Pachter reiterated his Neutral rating on the stock and lowered his price target from $6.00 to $5.50 per share. According to Wedbush, this upcoming fall is a key time for the company's stock.

GoPro's management team has shown an improved ability to execute and is moving toward its profitability target, but Wedbush remains on the sidelines with its Neutral rating until the company prove to investors it is a growth company during the upgrade cycle this upcoming fall.

This suggests investor sensitivity will be especially heightened into the company's third- and fourth-quarter financial reports expected at the end of Oct. and beginning of Feb.

Price Action

Shares of GoPro last traded at $3.84, down 2.29% for the session.