The analyst firm said that it believes GoPro's average selling price peaked in 2014, a year earlier than it had expected, due to an early discount of the HERO4 Session and the lack of a flagship model refresh. Oppenheimer analysts added that they expect a round of discounts on the HERO4 Black and Silver in the holiday season, which will the company's ASP down further.
"On the brighter side, GoPro has a much stronger retail presence with broader geographic coverage heading into this holiday season," Oppenheimer analysts wrote. "Its total retail outlets grew from 25,000 to over 40,000 in a year. We believe 2H15 sell-through data points from those new stores are critical to make calls for 2016."
The Oppenheimer note comes a few days after Morgan Stanley almost halved its price target for GoPro to $35 from $62, saying checks for the HERO4 Session "were decidedly more negative." The price target cut caused GoPro stock to hit an all-time low this week.
About 10.5 million shares of GoPro were traded by 1:02 p.m. Friday, above the company's average trading volume of about 9.9 million shares a day.
TheStreet Ratings team rates GOPRO INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
We rate GOPRO INC (GPRO) a SELL. This is driven by multiple weaknesses, which we believe 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 we cover. Among the areas we feel are negative, one of the most important has been a generally disappointing historical performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- GPRO's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 67.25%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
- GOPRO INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This year, the market expects an improvement in earnings ($1.80 versus $0.77).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Household Durables industry. The net income increased by 276.6% when compared to the same quarter one year prior, rising from -$19.84 million to $35.03 million.
- GPRO has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. To add to this, GPRO has a quick ratio of 2.06, which demonstrates the ability of the company to cover short-term liquidity needs.
- 47.81% is the gross profit margin for GOPRO INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 8.34% is above that of the industry average.
- You can view the full analysis from the report here: GPRO