Each quarterly report is like a snapshot of a company’s financial health. A recent snapshot of GoPro (NASDAQ:GPRO) indicates that the company is struggling in certain respects. Still, I’m neutral on GPRO stock overall, as it looks oversold after today’s plunge.
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GoPro makes small, portable cameras that you can easily strap to your body and take just about anywhere. These “action cameras” are ideal for first-person video streaming. As we’ll discuss in a moment, GoPro doesn’t seem to have a problem selling its products, but turning those products into profits is a different story entirely.
GoPro Sells Cameras and Gains Subscribers but Disappoints Investors
I’ll start with the good news. In 2023, sold three million cameras, up 6% year-over-year, and grew its subscriber count by 12% to 2.5 million. So, why did GPRO stock fall by 11% today?
The problem, evidently, is that GoPro hasn’t succeeded in converting its camera sales and subscriptions into strong revenue and profits. In the fourth quarter of 2023, GoPro’s revenue declined by 8% year-over-year to $295 million, while Wall Street had called for revenue of $326.13 million.
Furthermore, GoPro reported Q4-2023 earnings of $0.02 per share. That’s basically in line with Wall Street’s expectations but is much lower than the year-earlier quarter’s result of $0.12 per share.
GoPro’s management could come up with an action plan to reduce the company’s expenditures while keeping its product sales strong. This, I believe, would go a long way toward restoring the confidence of the investing community.
Is GPRO Stock a Buy, According to Analysts?
On TipRanks, GPRO comes in as a Moderate Sell based on two Holds and one Sell rating assigned by analysts in the past three months. The average GoPro stock price target is $2.50, implying 3.1% downside potential.
The Takeaway: Should You Consider GPRO Stock?
GoPro shares look pretty cheap after today’s sell-off, and the company seems capable of selling lots of little cameras. A turnaround may be possible if GoPro rolls out a major action plan that includes cost-cutting measures in order to boost profits. When all is said and done, I’m neutral on GPRO stock and am not considering a share position, though some people might choose to buy a few shares just for a fun, speculative bet.
