Scalper1 News
Beleaguered GoPro ( GPRO ) saw its shares tank anew on Monday on a report that unsold Hero action cameras are piling up at retail. GoPro stock fell 8.3% to 12.82 on the stock market today . Key supplier Ambarella ( AMBA ), which makes image-processing chips, saw its shares slide 5.9% to 41.96. Pacific Crest Securities analyst Brad Erickson said his firm’s U.S. retail checks showed GoPro’s days of inventory nearing all-time highs. “Channel inventory is again too high,” Erickson said in a report Sunday. “Our checks detected days of inventory at roughly three weeks consistently over the past month, and we estimate aggregate sell-through in the United States was down nearly 40% year-over-year in Q1.” He predicted continued “action camera softness” and expressed doubts about whether GoPro’s planned Karma drone could turn things around for the company. He rates GoPro stock as sector weight, with a fair value of 9 to 10. GoPro’s Hero action cameras are “a compelling device for a small niche of buyers,” but the company needs to improve ease of use to expand the market, Erickson said. GoPro is expected to launch its flying camera drone toward the end of the second quarter. The device could double GoPro’s total addressable market, he said. “We believe the stock has gotten some recent lift anticipating Karma, which could persist depending on how it is initially perceived by investors,” Erickson said. There are many unknowns about Karma including price, functionality and how it will compare to competitors like DJI. Erickson estimates that 5 million to 6 million consumer, camera-enabled drones will ship this year worldwide, roughly equivalent to the action camera market. RELATED: GoPro Rockets After Hiring Key Apple Designer Scalper1 News
Scalper1 News