GoPro Inc’s GPRO online strategic realignment to a subscription-based model has been impressive, enabling the company to expand margins and offer “greater go-forward visibility,” according to Jefferies.
The GoPro Analyst: Anna Glaessgen initiated coverage of GoPro with a Buy rating and a price target of $12.
The GoPro Thesis: GoPro.com is a “game changer,” as it delivers margins that are higher by around 500 to 600 basis points than retail channels and offers greater control of distribution, which enhances channel health and demand visibility, Glaessgen said in the initiation note.
“A rising mix of higher MSRP product (85% of '21 product sales >$400 MSRP, vs. 74% in '20) has helped unlock ASP as an increasingly important growth lever (+17% y/y in 2021), which we believe continues to have upside,” the analyst wrote.
“That said, the company retains access to lower price points via older launches (which, importantly, minimizes dilutive brand impact),” she added.
GPRO Price Action: Shares of GoPro had risen by 2.05% to $8.72 at the time of publication Monday.
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