GoPro Inc (NASDAQ:GPRO) is overpriced even though it is currently in a sweet spot, Jim Cramer said in a recent discussion on CNBC’s Squawk on the Street.
Cramer saying GoPro Inc (NASDAQ:GPRO) is overpriced comes after the company made its debut in the stock market last week. After its initial public offering, it was said that the company’s IPO is oversubscribed.
According to Cramer, one of the things he has learned with GoPro Inc (NASDAQ:GPRO) is that every day, there seems to be a new way to be able to make its products work for you. He said that for example, if you have a kid, using a GoPro camera is a perfect way to see these kids’ lives through their viewpoint.
Cramer added that he has seen the cameras made by GoPro Inc (NASDAQ:GPRO) in action many, many time either through the athletes who use these cameras or the ordinary people who also love these devices.
He then went on to compare the company to Kodak. His panel colleagues then went on to point out that Kodak did not do very well in the end but Cramer said that the company did have a good run. However, he added that maybe he won’t be so wrong in this comparison in the future. Nonetheless, he said that the stock is “overvalued”.
According to Cramer, the company’s stock is now in a “sweet spot” where the people who love the company’s products buy the stock and thereby keep the price high. How often does this team see this kind of situation, he asked.
David Faber joined the discussion by wondering what would happen to the company if they stay in this business model for so long. Will the stock tank after the products that GoPro Inc (NASDAQ:GPRO) makes are commoditized? Faber said that it is not clear that the company will not face heavy competition in their space.
Watch the rest of the discussion below where Cramer, Faber and Carl Quintanilla discussed how the company is maintaining its multiple by pitching itself as a content company.