GoPro Gears Up for Today's Adrenaline-Pumping $3B IPO Engagement

NEW YORK (TheStreet) -- The action sports camera maker GoPro is gearing up for its debut at Nasdaq in what could be the biggest consumer electronic initial public offering in more than two decades.

GoPro expects to sell 17.8 million shares priced at between $21 and $24 per share, valuing the company at nearly $3 billion.

GoPro operates in a fiercely competitive market which includes camera makers such as Canon (CAJ) and Nikon (NINOY), consumer electronic giants and smartphone makers such as Samsung (SSNLF), Sony (SNE) and Apple (AAPL), specialty equipment makers like Garmin (GRMN), as well as Google (GOOG) (GOOGL) whose Google Glass has been used by skydivers.

However, GoPro's strength lies in its management team, which includes its charismatic founder and executives from Microsoft (MSFT) and Qualcomm (QCOM), its large customer base, a powerful brand and a strong track record of growth.

>>Read More: Will GoPro IPO Wipe Out or Live Up to All This Hype?

The IPO market has been going hot this year. So far, 144 companies debuted raising more than $30 billion. However, there hasn't been any activity in the consumer electronics space since Skullcandy (SKUL) got listed in mid-2011.

GoPro expects to raise nearly $400 million from the offering which will be used for repaying a $111 million term loan, making acquisitions and for general corporate purposes.

GoPro was founded in 2004 by Nick Woodman, a surfer and a self-made billionaire, and shipped its first camera that year. This year, the company will likely generate more than $1 billion in revenues, primarily coming from the sale of its flagship HERO line of cameras and accessories.

GoPro has recently made some high-profile appointments at its top. This year, the company hired Microsoft's former vice-president for business development Tony Bates as its president and Qualcomm's executive Jack Lazar as its CFO.

GoPro initially focused on the action sports market, catering to the needs of the adrenaline junkies. The company's customer base, however, has grown significantly to include all kinds of buyers.

Last year, GoPro sold more camcorders than any other company in the U.S. According to data provided by NPD Group, HERO3 holds 45% of the U.S. camcorder market. It was also the sixth largest player in the camera accessory niche in 2013.

The strength of GoPro's brand is also evident by the fact that last year, GoPro's customers uploaded nearly 2.8 years of videos on YouTube with the company's name in the title.

In its prospectus, GoPro has said that "growing adoption" of its cameras and the "engaging content" they produce could allow "GoPro to become an exciting new media company." This, however, might not happen in the near term as GoPro has grown significantly solely by selling its cameras.

GoPro's shipments of cameras increased from 1.14 million in 2011 to 2.3 million in 2012 to 3.8 million in 2013. Consequently, the company's revenues went up from $234 million in 2011 to $526 million in 2012 to $985.7 million in 2013. With this kind of growth, the company will likely cross the $1 billion revenue milestone this year.

Meanwhile, its operating income climbed from $38.8 million in 2011 to $53.6 million in 2012 to $98.7 million in 2013, getting close to $100 million.

GoPro's devices are sold in more than 100 countries in more than 25,000 retail outlets. The business has a significant footprint in the international markets. Over the last three years, GoPro generated more than half of its revenue outside of the U.S.

The company's growth story received a setback in the quarter ending March 31 when it witnessed 7.6% year-over-year drop in revenue to $235.7 million, but this was largely due to a one-off event which lifted the sales in the first quarter of 2013. As a result, the company managed to avoid the seasonal drop in sales in the first quarter of 2013. This, however, did not happen in 2014 which is why GoPro reported year-over-year decline in quarterly sales and shipment. 

At the time of publication, the author held no positions in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

Read More:

Barnes & Noble CEO Huseby Sees Value in Nook Spinoff

More from Opinion

Why Google's Search Momentum Won't Be Badly Hurt by New EU Rules

Why Google's Search Momentum Won't Be Badly Hurt by New EU Rules

Flashback Friday: Amazon, Chip Stocks, Memorial Day

Flashback Friday: Amazon, Chip Stocks, Memorial Day

Time to Talk Tesla: What Happened This Week, Elon?

Time to Talk Tesla: What Happened This Week, Elon?

Apple Needs to Figure Out Its Self-Driving Vehicle Strategy

Apple Needs to Figure Out Its Self-Driving Vehicle Strategy

Throwback Thursday: Tesla, Chip Stocks, TheStreet's Picks

Throwback Thursday: Tesla, Chip Stocks, TheStreet's Picks