GoPro Inc (NASDAQ:GPRO) reported their first earnings after scintillating debut in June. The report was a mixed bag with more than expected revenues, but with a wider loss. GoPro’s IPO was initially priced at $24, doubled its value, but then dropped by 8% following the company’s earnings report.
In spite of impressive performance on the Street since their IPO, many analysts’ still feel that the GoPro Inc (NASDAQ:GPRO) shares are valued higher. Fox Business Network’s Liz MacDonald talked about views of many analysts’ about the GoPro in Fox Business.
MacDonald said that GoPro Inc (NASDAQ:GPRO)’s valuation was on par with UST, Legg Mason Inc (NYSE:LM) and Peabody Energy Corporation (NYSE:BTU) according to her initial reports. She added that the GoPro is currently trading at 45 times adjusted earnings and reported stiff losses in their first earnings report, since the company went public.
“[…] Now we have got Citigroup, Raymond James and Stifel Nicolaus saying that this stock is not a ‘Buy.’ The thrill is gone. They are worried about the decelerating growth,” MacDonald said.
She added that the GoPro Inc (NASDAQ:GPRO) has already found their market and customers in surfers, cyclists and many adventure sports people. The big question for GoPro is whether they can keep selling the $200 and $400 video cameras, in spite of an expected attempt from many companies to manufacture and sell similar cameras at a lower price.
MacDonald raised her doubt if GoPro Inc (NASDAQ:GPRO) might be able to increase their camera price or increase their targeted customers to get more revenues and profits. She also pointed at the heavy competition from smartphones and their rapid growth in-camera capability, which gives fewer reasons for consumers to acquire dedicated cameras.
Due to all these uncertainties, many analysts’ feel that the GoPro stock is currently not a stock worth to buy. GoPro Inc (NASDAQ:GPRO) might have to come up with new strategies to increase their volume of sales to eradicate all these concerns and justify their valuation.