{"id":44580,"date":"2023-08-04T17:06:37","date_gmt":"2023-08-04T21:06:37","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/gopros-stock-falls-as-strategic-shift-will-require-longer-payoff-period\/"},"modified":"2023-08-04T17:06:39","modified_gmt":"2023-08-04T21:06:39","slug":"gopros-stock-falls-as-strategic-shift-will-require-longer-payoff-period","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=44580","title":{"rendered":"GoPro\u2019s stock falls as strategic shift will require longer payoff period"},"content":{"rendered":"
\n

GoPro Inc. offered a downbeat outlook for its current quarter, and its shares are selling off Friday.<\/p>\n

The maker of action cameras said it expects $270 million to $290 million in revenue for the third quarter, along with adjusted earnings per share ranging from breakeven to 4 cents. While just two analysts follow GoPro
\n GPRO,
\n -9.83%<\/bg-quote>,<\/span>
\n according to FactSet, their expectations as of July 31 were for $320 million in revenue and 16 cents in adjusted EPS.<\/p>\n

\n

Chief Financial Officer Brian McGee said in prepared remarks alongside Thursday afternoon\u2019s earnings that GoPro outperformed on revenue in the second quarter amid better-than-expected sell-through of its entry-level offerings. <\/p>\n

\u201cThis Q2 revenue overperformance, combined with retailers continuing to carry lower weeks of supply, is contributing to a softer Q3 guide,\u201d he said. Additionally, the company called out\u201da larger-than-expected drop off in sales at GoPro.com due to the discontinuation of subscription-related camera discounts at the time of purchase.\u201d<\/p>\n

Opinion<\/strong>:\u00a0Apple is slogging toward a mediocre milestone not seen in 22 years<\/p>\n

GoPro shares were down about 5% in Friday morning action.<\/p>\n

\u201cWe look forward to 2024, when we expect to reap the full-year benefit of our strategic shift, unburdened by price protection expenses of $30 million in 2023 associated with our price change,\u201d McGee added in his commentary.<\/p>\n

Oppenheimer\u2019s Martin Yang noted that GoPro is trying to \u201crevitalize its retail presence and increase sell-through by increasing marketing spend\u201d and lowering average selling prices, trends that are causing margin compression. <\/p>\n

\u201cWe expect this reduced profit outlook to continue\u201d until the second half of 2024. Still, he saw \u201csigns of progress,\u201d including an increased retail-subscriber attach rate in the second quarter. He was also encouraged by GoPro\u2019s sell-through outlook of 750,000 units for the third quarter.<\/p>\n

Yang had a perform rating on GoPro\u2019s stock. <\/p>\n

Wedbush\u2019s Alicia Reese took a more upbeat view of the shares, while also calling out the \u201cencouraging\u201d attach rates and first- and second-year subscription retention momentum.<\/p>\n

\u201cOver time, if these trends hold, this should drive enough margin expansion to get\u00a0GoPro\u00a0back to the EPS level we had previously estimated,\u201d she wrote. <\/p>\n

Don\u2019t miss<\/strong>: Apple\u2019s slowdown era rages on, and the iPhone may not be enough to power its stock<\/p>\n

Additionally, she said she thinks investors \u201cinvestors will warm to the story over time, particularly as\u00a0GoPro\u00a0accelerates its share repurchases.\u201d<\/p>\n

She gave the company credit for \u201cquickly\u201d changing its strategy in response to adverse conditions such as inflation and low retail inventory replenishment, and she reiterated her outperform rating and $6 target after the report.<\/p>\n

See also<\/strong>: Ad agency WPP cuts sales outlook over caution from U.S. technology companies<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

GoPro Inc. offered a downbeat outlook for its current quarter, and its shares are selling off Friday. The maker of action cameras said it expects $270 million to $290 million in revenue for the third quarter, along with adjusted earnings per share ranging from breakeven to 4 cents. While just two analysts follow GoPro GPRO, […]<\/p>\n","protected":false},"author":1,"featured_media":44581,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-44580","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nGoPro\u2019s stock falls as strategic shift will require longer payoff period | iFintechWorld<\/title>\n<meta name=\"description\" content=\"GoPro Inc. offered a downbeat outlook for its current quarter, and its shares are selling off Friday. 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