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TheStreet Open House

GoPro Tumbles After Issuing First Quarterly Earnings Report Since IPO

Stocks in this article: GPRO

NEW YORK (TheStreet) -- Shares of video content hardware and software developer GoPro (GPRO) are tumbling after the company reported a net loss during the second quarter that was nearly four times larger than its loss a year ago. However, the company's earnings per share and revenue results in its first report since its initial public offering in June beat the consensus forecasts of analysts.

WHAT'S NEW: GoPro's Q2 EPS was 8c, which beat analysts' consensus by 2c. The company's Q2 revenue was $244.6M, exceeding analysts' consensus of $237.73M. The company said it is seeing a "tremendous" volume of quality content generated by its users and a 200% year over year increase in video views on YouTube, "which is fueling our virtuous cycle whereby viewership of GoPro content drives sales." The company also commented that its Q2 performance "demonstrates our users' continued passion for GoPro's products, content and brand." Still, GoPro reported that its Q2 net loss was $19.8M, which is almost four times bigger than the $5.1M loss the company experienced a year ago.

WHAT'S NOTABLE: During its earnings conference call, GoPro said that it is anticipating Q3 revenue to be in the range of $255M-$265M, which is higher than analysts' consensus of $253.49M. In an interview with CNBC this morning, GoPro CEO Nicholas Woodman said that the company is continuing to expand the scale of content channels and that its stock price movement has no effect on the company's strategy. He said that the firm is aiming to help people share content. He believes with people creating and managing more content, it increases pull from user-generated content to be distributed.

ANALYST REACTION: Dougherty analyst Charlie Anderson downgraded GoPro to Neutral from Buy, citing valuation. Despite the downgrade, Anderson noted that the company has room to improve globally and plans to revisit his opinion on the firm if he gains confidence in higher estimates. Piper Jaffray analyst Sean Naughton believes that GoPro's share decline is a buying opportunity. He said that the company's earnings results and guidance should be viewed as a letdown, he still is a fan of the GoPro story, as it has a quickly growing and category-dominant consumer electronic product with an expansive path for development, combined with a brand that is creating an environment of hardware, software and media to keep clients. Naughton maintains an Overrating rating on GoPro with a $48 price target.

PRICE ACTION: On June 26, GoPro priced its initial public offering of stock at $24 a share, which was the high end of its expected range. Since its IPO, the company's shares have increased 30%. During afternoon trading, GoPro was down $7.42, or 15.5%, to $40.55.

Reporting by Gina Gioldassis and Laurie Pasternack Chan.

The Fly provides comprehensive coverage of stock news and Street research and delivers it in real-time. The Fly breaks market-moving news and explains sudden stock movements in a rapid-fire, short-form story format. Follow @theflynews on Twitter. For a free trial, click here.

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