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Research Alert: CFRA Maintains Hold Recommendation On Shares Of Gopro, Inc.

· 02/05/2021 07:07

12:05 PM EST, 02/05/2021 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

We increase our 12-month target to $9 from $8 on higher revised peer-discount P/E of 14.5x our '22 EPS estimate, given our view of muted growth for action camera devices. We up our '21 EPS estimate to $0.61 from $0.32 and start '22's at $0.62. GPRO posts Q4 EPS of $0.39 vs. $0.70, better than the $0.38 consensus. Sales fell 32%, slightly missing expectations, as lower unit volume was partly offset by a 14% increase in prices. Gross margin was flat at 38%, but GPRO cut operating expenses by 26%, supporting EPS leverage. We are encouraged by GPRO's ability to increase its subscriber base (761,000 at Q4 end), which grew 52% from Q3 and 145% from a year earlier. We think GPRO is executing well on channel inventory reduction, down 10% from Q3 and 50% since the start of the year. We like GPRO's ability to leverage its direct-to-consumer strategy (GoPro.com sales up 91%) and cash generation but continue to remain wary about its long-term growth potential, as we see limited ability to expand its addressable market.