GoPro Rises Following Analyst Upgrade On ‘Compelling’ Products

Shares of GoPro (GPRO) are rising after an analyst at Oppenheimer upgraded the stock to Outperform citing the company’s “compelling” products and what the firm calls appropriate pricing.

‘COMEPLLING’ PRODUCTS, APPROPRIATE PRICING: On Wednesday, Oppenheimer analyst Andrew Uerkwitz upgraded GoPro to Outperform from Perform with a $9 price target. The analyst told investors in a research note that he believes the company has done everything it can to position itself for success through “appropriate pricing,” and with new features such as live streaming and gimbal-like image stabilization, he believes its products are “compelling.” Uerkwitz contended that this should be enhanced by targeted marketing and a vastly improved software editing suite. The analyst added that GoPro management has implemented a strategy to reset the company with operational expenditures down roughly 50% from peak, products refocused on what has worked and new features focused on ease-of-use. In addition, the company has cleared channel and shelf space over the last 18 months and inventory currently sits at a four-year low, he noted. Uerkwitz believes that with the new products, clean channel and potential inventory replenishment, the company should return to growth in 2019.

WHAT’S NOTABLE: On September 20, GoPro announced its new product lineup, including its $399 flagship HERO7 Black, with HyperSmooth, an in-camera video feature. The company said the feature “makes it easy to capture professional-looking, gimbal-like stabilized video without the expense or hassle of a motorized gimbal. And HyperSmooth works underwater and in high-shock and wind situations where gimbals fail.” Along with HERO7 Black, GoPro also introduced a new form of video called TimeWarp, which transforms longer experiences into short, flowing videos. The company said TimeWarp Video “applies a high-speed, ‘magic-carpet-ride’ effect to your videos. Imagine a scenic drive, ocean dive or walk through the city compressed into a super-stabilized, sped-up version of itself, with the entire experience playing out in seconds.” In addition, the company said HERO7 Black is the first GoPro to live stream, enabling users to automatically share in real time to platforms internationally. GoPro also announced the HERO7 Silver and HERO7 White, which both feature improved video stabilization. The 4K $299 HERO7 Silver and 1080p $199 HERO7 White are waterproof to 33 feet.