GoPro Inc

GoPro, Inc. (NASDAQ: GPRO) produces cameras, and mountable and wearable accessories. The Company offers a family of flagship cameras, including its cloud connected HERO12 Black, HERO11 Black, HERO11 Black Mini, HERO10 Black, HERO10 Black Bones, HERO9 Black, and MAX cameras. HERO12 Black is a waterproof camera, featuring a GP2 processor and HyperSmooth 6.0 image stabilization.

Recent Business and Financial Updates

• Financial Performance Overview: Total revenue amounted to USD 155 million, representing an 11% decrease year-over-year. However, subscription and service revenue saw a positive trend, increasing by 12% year-over-year to reach USD 26 million. The company's annual recurring revenue from subscriptions stands at approximately USD 125 million as they enter Q2. Despite challenges, the subscriber retention rate hit an all-time high at 69%, underscoring sustained customer loyalty.
• Detailed Financial Metrics: In Q1 2024, revenue from the retail channel accounted for USD 106 million, constituting 68% of total revenue and marking a notable 33% year-over-year increase. Conversely, revenue from GoPro.com, including subscription and service earnings, totaled USD 49 million, reflecting a significant 48% decline year-over-year. The company reported a GAAP net loss of USD 339 million, or USD 2.24 loss per share, primarily due to a USD 295 million tax valuation allowance. On a non-GAAP basis, GoPro recorded a net loss of USD 32 million, or USD 0.21 loss per share, excluding the tax valuation allowance charge.
• Operational Insights and Market Position: GoPro's strategic focus on higher-end products is evident, with cameras priced at or above USD 400 contributing 70% of Q1 2024 camera revenue, while entry-level products accounted for 20% of camera sales. The average selling price (ASP) for cameras rose by 5% year-over-year to USD 395. Despite financial challenges, the company maintained a GAAP and non-GAAP gross margin of 34.1% and 34.4%, respectively, reflecting slight improvements from the prior year period.
• Recent Developments and Expansion Efforts: In February 2024, GoPro completed the acquisition of Forcite Helmet Systems, a move aimed at enhancing their technological capabilities in the sports equipment sector. Additionally, the release of the Quik Desktop App for macOS and the introduction of a new USD 99.99 Premium+ subscription tier underscore GoPro's ongoing efforts to diversify its product offerings and expand its subscription revenue streams. These strategic initiatives are pivotal as GoPro navigates toward sustained growth and profitability in the competitive tech market.

Technical Observation (on the daily chart):

The Relative Strength Index (RSI) over a 14-day period stands at a value of 33.25, downward trending and currently near oversold zone, with expectations of a consolidation or a reversal from the current support levels. Additionally, the stock's current positioning is below both the 50-period SMA and 200-period EMA, which may serve as dynamic medium to long-term resistance levels.

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Buy’ rating has been given to GoPro Inc. (NASAQ: GPRO) at the current market price of USD 1.32 as of June 27, 2024, at 09:10 am PDT. 

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is June 27, 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level that the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the New York Stock Exchange (NYSE), NASDAQ Capital Markets (NASDAQ), and or REFINITIV. Typically, all sources (NYSE, NASDAQ, or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.