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GoPro Investors Swim With The Sharks Ahead Of Q1 Earnings

GoPro ( GPRO ) investors are bracing for the worst as the maker of wearable action cameras prepares to report first-quarter results after the market close Thursday. GoPro stock fell 2.2% to 11.40 on the stock market today . A year ago, the stock traded near 50. Analysts polled by Thomson Reuters expect the San Mateo, Calif.-based company to lose 60 cents a share in Q1, compared with earnings per share of 24 cents in the year-earlier period. Sales are forecast to decline 53% to $169.1 million. For the current quarter, Wall Street is modeling for GoPro to lose 43 cents a share, compared with year-ago earnings of 35 cents a share, on sales of $245.6 million, down 42%. GoPro is facing concerns about market saturation and pricing pressure from competitors, including Garmin ( GRMN ), Sony ( SNE ) and others. Possible catalysts for the company include an upcoming flying-camera drone — a quadcopter called Karma — and devices for recording 360-degree videos for virtual reality headsets like Facebook ’s ( FB ) Oculus Rift. Karma is expected to debut this quarter. “We applaud GoPro’s recent moves to build a deeper technical bench and listen closely to customer and partner demands.” Oppenheimer analyst Andrew Uerkwitz said in a research report Tuesday. “However, we remain sidelined as upcoming product releases (drone, flagship camera, and possibly a 360-degree camera) can introduce much volatility.” Uerkwitz rates GoPro stock as perform, or hold. “We believe the March quarter results and June quarter guidance could be a bit rough as the company is in full-on transition mode,” Uerkwitz said. “We may see inventory issues (the March quarter is typically slow) for older cameras in the channels.” Dougherty analyst Charles Anderson reiterated his neutral rating on GoPro stock in a report Wednesday. “GoPro is currently suffering from a stale product portfolio and delayed efforts to improve editing software and general usability,” Anderson said. “This is harming demand and leading to declining sales. “The response has been a large increase in both R&D and sales and marketing spend, which is going to lead to near-term losses. We believe the company needs new, and differentiated, products to pull it out of the hole.” RELATED: GoPro Finds Woe In High Action-Camera Inventories

GoPro Finds Woe In High Action-Camera Inventories

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

GoPro Adds Developer Program After Snatching Apple Designer

GoPro ( GPRO ) has launched a developer program with 100 companies, a day after the digital camera maker announced that it hired away a key member of Apple ’s ( AAPL ) industrial design team. GoPro stock rose 2% in the stock market today after surging 19% on Wednesday after the San Mateo, Calif.-based company announced the hiring of Danny Coster as vice president of design, effective at the end of April. He has been a core member of Apple’s design team for more than 20 years. Even with the two-day gains, GoPro stock is down over 20% in 2016. It has a low IBD composite rating of 31 out of a possible 99. The digital camera maker unveiled the “GoPro Developer Program” at a press event in San Francisco on Thursday. The program aims at helping third-party companies to create mobile apps, accessories, and physical camera mounts. Initial partners include car maker BMW ( BAMXY ), toy maker Fisher Price (owned by Mattel ( MAT )),   Twitter ( TWTR )-owned Periscope, Sennheiser, SanDisk ( SNDK ) and Volkswagen ( VLKAY ).