In a note Tuesday morning, analysts at JMP initiated coverage of GoPro with a “market outperform” rating and a price target of $60, a premium of more than 60% over yesterday’s close. JMP estimates that GoPro, which makes wearable cameras for extreme sports enthusiasts, will achieve 22% revenue growth in both 2014 and 2015 to reach $1.5 billion in sales and EPS of $1.00. In 2016, they model growth to accelerate to 35%, to reach $2 billion in sales and EPS of $1.78.
“We feel its market vision and execution have established GoPro as a durable multimedia and active lifestyle brand,” JPM wrote, citing sales and a strong YouTube and media presence. “Our positive investment stance is predicated on the view that first mover and financial advantages will allow it to capitalize on a multitude of underpenetrated and/or untapped opportunities to monetize its technology and brand.”
GoPro went public on June 25, after which shares have surged more than 60%. Shares fell 5.2% yesterday after a Barron’s article question the company’s future, noting that smartphones will likely be able to render GoPro obsolete.
Microsoft (MSFT) shares rose 0.7% to $42.45 after reports that they were cutting jobs.
Sources told Bloomberg that Microsoft is planning its biggest round of job cuts in five years. These reductions, which may be revealed this week, will take place mainly in the Nokia division, marketing, and engineering. According to the Bloomberg sources, the number of jobs cut will exceed the number in 2009, when the company cut 5,800 jobs, or about 5% of their workforce at the time, in one year. The company is looking to slim down and to integrate the Nokia Oyj handset unit.