GoPro (GPRO) Stock Higher, BofA/Merrill: DJI Doesn't Pose Much of a Risk - TheStreet

NEW YORK (TheStreet) -- Shares of GoPro (GPRO) - Get Report  were advancing in mid-afternoon trading on Wednesday as Bank of America/Merrill Lynch said DJI's Mavic drone released yesterday doesn't pose a serious threat to the San Mateo, CA-based technology company. 

The firm has a "buy" rating and $19 price target on GoPro stock, according to TheFly

The Chinese drone company's Mavic will appeal more to drone enthusiasts, while GoPro's Karma drone will be more popular with casual consumers and users focused on film, BofA/Merrill said.

DJI's drone release also isn't likely to affect GoPro's fourth quarter earnings because Karma won't generate much revenue until 2017. At that point, DJI might pose a risk to GoPro's earnings, the firm noted. 

That said, BofA/Merrill added that Karma will be able to obtain a 4% to 5% share of the drone market in 2017. 

Oppenheimer also said it believes GoPro and DJI hold "very different" propositions.

While DJI's Mavic is highly compact, lightweight and can detect obstacles up to 98 feet away, GoPro still boasts brand and consumer loyalty, Oppenheimer said. 

That loyalty should be tested as competition and innovation ramp up in the drone market, the firm added. 

Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:

TheStreet Ratings team rates GoPro as a Sell with a ratings score of D. This is driven by a few notable weaknesses, which it believes should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks it covers. The company's weaknesses can be seen in multiple areas, such as its feeble growth in its earnings per share, deteriorating net income, disappointing return on equity, weak operating cash flow and generally disappointing historical performance in the stock itself.

You can view the full analysis from the report here: GPRO

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