After talking to the CEO of action camera maker iON Cameras, a major competitor for GoPro, Citi analyst Jeremy David wrote a cautious note about GoPro. David noted that iON expanded from 150 stores in 2013 to 6,000 this holiday season, and is on track to be in 10,000 stores in 2015.
"Our discussions with the CEO of iON leave us incrementally more cautious on GoPro with 2015 revenue growth of 22% in our model potentially at risk given a likely slowdown in the category post the HERO4 launch and increased competition which could put pressure on ASP/mix," David wrote.
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GoPro uses Ambarella chips for video compression and image processing. Shares of both companies were down following the note.
TheStreet Ratings team rates AMBARELLA INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate AMBARELLA INC (AMBA) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."