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GoPro Stock Surges; JPMorgan Likes Pivot to Direct-to-Consumer

GoPro shares climb as a JPMorgan analyst views the company as a 'reopening play.'
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GoPro  (GPRO) - Get GoPro, Inc. Class A Report surged Thursday after a JPMorgan analyst upgraded the video-products company to overweight from neutral and boosted his price target to $15 from $13. 

Shares of the San Mateo, Calif., camecompany at last check were 6.2% higher at $12.27.

Analyst Paul Chung said in a note to investors that the company's "strong execution" is underscored by its pivot to direct-to-consumer, high subscriber attach rate on, and price increases, according to the Fly.

These are driving GoPro's margins structurally wider, increasing revenue visibility, and "smoothing out" sales over the longer term, Chung said. 

The analyst also views GoPro as a "reopening play" as the pandemic eases and the world reopens.

Earlier this month, GoPro beat Wall Street's third-quarter earnings expectations. The company posted earnings of 34 cents a share, up from 20 cents a share a year earlier and ahead of the FactSet analyst consensus of 20 cents a share.

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Revenue totaled $316.7 million, up from $280.5 million a year earlier and above the FactSet consensus of $292.1 million. 

Subscription revenue totaled $14 million, more than double (up 143%) the year-earlier figure, while GoPro subscriber count was 1.34 million, up 168%.

Last week, Morgan Stanley analyst Erik Woodring upgraded GoPro to equal weight from underweight with a price target of $11, up from $9.80. 

After the third-quarter results, it is clear that GoPro's execution has improved and subscriber churn has outperformed, "paving a clearer path to positive estimate revisions," Woodring said. 

The analyst said he remained cautious longer term but is giving the company "credit where credit is due." GoPro's execution is no longer the persistent material headwind it once was, says Woodring.