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GoPro Falls Sharply After Revenue Misses Estimates

GoPro plunges after the action camera maker posts fourth-quarter revenue below analysts' expectations.

Shares of GoPro  (GPRO)  plunged Friday after the maker of action cameras posted weaker-than-expected revenue for the holiday quarter as the coronavirus pandemic impacted growth in Europe and the Asia Pacific region.

Shares of the San Mateo, Calif., company dropped 13.6% to $9 in trading Friday. The stock has risen 104% in the past 52 weeks. It trades at 15 times its estimated earnings per share for the coming year.

GoPro reported fourth-quarter revenue of $358 million, down from $528 million a year earlier and below the $374 million estimated by analysts surveyed by FactSet.

"Our revenue came in within our guidance. Within the split between retail and consumer ..., 5% of our revenue was kind of split between a little bit more heavy to retail than direct to consumer. We definitely saw some slowness in EMEA and APAC channels, largely related to Covid and North America did do well and better than what we expected and made up for some of that in Europe and in Asia," said Chief Executive Nick Woodman on the earnings call.

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Net income for the fourth quarter was $44 million, or 28 cents a share, down from $96 million, or 65 cents a share, in the year-prior period. On an adjusted basis, GoPro earned 39 cents a share, down from 70 cents a share in the year-earlier quarter but just ahead of the 38 cents a share that analysts had been expecting.

The company generated $116 million in revenue from its website, which it said was a record figure.

“GoPro’s shift to a more subscription-centric consumer-direct model is resulting in a simpler, more profitable business with materially better cash generation,” said  Woodman in a statement.

“The steps we’ve taken to improve our business during the pandemic should serve us very well when the world begins to recover in earnest - but as a business, fortunately, we don’t have to wait for that to happen," he added. 

Analysts have one buy, three hold, and two sell recommendations on the stock, according to Bloomberg.