GoPro Inc (NASDAQ: GPRO)’s Shares Ignited By Underwriters’ Reports

After a dry spell in GoPro Inc (NASDAQ: GPRO)’s stock activity, that quiet period has ended yesterday morning when brokerage and investment firms were finally allowed to publish their reports.

While the reports did not all concur with a single rating, they were generally positive. Subsequently, the price of GoPro’s stock has risen just under 5% after the release.

So far, the companies that have released their reports on the camera company include J.P. Morgan, Citigroup, Barclays, Stifel, Baird, and Piper Jaffray.

J.P. Morgan was the first to disclose its rating on the stock, rating it with a $51 target price and naming the stock as buy. The report implied that there’s and upside of 20%, since the company’s stock was trading at roughly $42.50 yesterday when the reports were released.

Citigroup rated the stock as neutral.

Barclays gave the stock a rating of equal weight, with a target price on the low end of $45.

Stifel named the stock as neutral.

Baird named the stock as neutral and stated a price target of $43.

Piper Jaffray rated the stock as buy and gave it a price target of $48.

JMP Securities released their report, being the most optimistic of the group. The firm rated the camera company at market outperform, at a price target of $60.

In the camera and consumer electronics niche, GoPro does not have the competitive advantage. The industry is growing rapidly and addresses an increasing audience specific in professional, high quality, action cameras. The company has also been expanding its target audience, and has been successful so far in breaking into the mass-market niche for electronics. GoPro’s unwavering focus on the complete experience of the user in capturing, viewing, and sharing video footage, as well as its strong branding. These factors give the company a leg up in the competition against others in the consumer electronics market. This way, GoPro can be expected to keep their profitability in the business.

Another key factor to the company’s success is the company’s innovative and exclusive products and distribution software. It is important to highlight GoPro’s branded media outlets as a method for gaining and sharing the video footage.

However, the company’s margins have been squeezed every quarter, which shows that there is a significant lack of pricing authority. Given the flood of competitors that already have or are set to enter the market, that would compress GoPro’s margins even further.

Despite these negative predictions, analysts seem to be expecting significant revenue and considerable growth in margins. Their PE ratio for the company is in the 80’s, and the price to sales ratio is over 5.

GoPro shares have been up over 75% since their debut on the NASDAQ on June 26^th. According to analysts, there is still much more room for the stock to grow.

The end of GoPro’s quiet period provides investors with the opportunity to sell before the share-lock time is upon investors and the stock sells off.