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GoPro (GPRO) Up 6.9% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for GoPro (GPRO - Free Report) . Shares have added about 6.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is GoPro due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
GoPro Q2 Loss Narrower Than Expected
GoPro reported a second-quarter 2024 non-GAAP loss of 24 cents per share, narrower than the Zacks Consensus Estimate of a loss of 25 cents. The company incurred a loss of 5 cents per share in the year-ago quarter.
GoPro generated revenues of $186 million, down 23% year over year. The figure exceeded company’s guidance of $170 million (+/- $5 million). The top line beat the consensus mark by 9.2%.
Higher demand for the HERO12 Black camera in Europe and North America cushioned the top-line performance.
Quarter in Details
GoPro shipped 576 million camera units in the reported quarter, down 18.2% year over year.
It recorded 2.53 million subscribers, marking 4% year-over-year growth. Management envisions subscribers at 2024-end to be 2.6 million.
Region-wise, revenues from the Americas totaled $88.7 million (47.6% of total revenues), down 27% from the prior-year levels. Revenues from Europe, the Middle East and Africa of $64.5 million (34.6%) declined 3% year over year. The Asia Pacific generated revenues of $33 million (17.8%), down 38% on a year-over-year basis. Sales from the Americas and Asia-Pacific regions were affected primarily by consumer-related macroeconomic troubles, especially in China.
Based on channels, revenues from GoPro.com of $49.1 million (26.4%) plunged 35.1% year over year. Our estimate was pegged at $30.6 million.
In this channel, hardware revenues totaled $22.8 million compared with $51.2 million in the prior-year quarter. Subscription revenues amounted to $26.3 million, up 8% year over year.
Retail channel registered revenues of $137.1 million (73.6%), which fell 17.1% year over year. We estimated the metric to be $139.6 million.
It added 800 new retail doors across all regions, especially EMEA and Latin America. Management noted that GoPro added more than 5,000 new retail doors since the second quarter of 2023. It further added that the company remains on track to add another 3,000 to 6,000 new doors by the end of 2025 to boost its go-to-market capabilities for GoPro’s product roadmap.
The company had $97.3 million in inventory compared with $135.4 million in the year-earlier quarter.
Other Details
Gross profit of $56.7 million decreased 25.2% year over year. Total operating expenses of $103.2 million rose 5% year over year. Operating loss totaled $46.5 million compared with $22.5 million in the prior-year quarter.
Non-GAAP gross margin came in at 30.7% compared with 31.6% in the year-ago quarter.
Adjusted EBITDA loss was $33.4 million compared with $10.3 million a year ago.
Cameras with suggested retail prices at or above $400 contributed 76% to revenues in the reported quarter compared with 75% in the prior-year quarter.
Cash Flow & Liquidity
In the quarter under review, GoPro generated $0.6 million of net cash from operating activities compared with $7.852 million of cash used in the year-earlier quarter.
As of Jun 30, the company had $133 million of cash and cash equivalents with $92.9 million of long-term debt.
Guidance
For the third quarter of 2024, revenues are estimated to be $255 million (+/- $5 million). Non-GAAP adjusted loss is forecasted to be 5 cents per share (+/- 2 cents).
Gross margin is anticipated to be 34% (+/- 50 basis points). Gross margin performance is expected to be driven by new product sales, increasing subscription and service revenues and improving product costs, partly offset by higher promotional activity.
Street ASP is projected to be $300.
It expects a further delay in the launch of a new entry-level camera into 2025 instead of the fourth quarter of 2024. The delay in launch will have a negative impact of $20-$25 million in the fourth quarter of 2024 relative to earlier guidance. The cumulative effect of delayed product launches for 2024 revenues is projected to be $100 million.
As a result, it now expects units to be between 2.6 million and 2.7 million compared with 2.85 million projected earlier. Revenues in 2024 are anticipated to be in the range of $850-$870 million compared with the earlier projection of slightly higher than $900 million.
Apart from the delays, muted consumer spending in the absence of promotional activity, declining camera sales at GoPro.com, global macroeconomic concerns, forex volatility (China and Japan) and increasing competition remain headwinds. The company is on track to launch two new cameras in September 2024 – including the new $199 HERO camera.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -4000% due to these changes.
VGM Scores
At this time, GoPro has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, GoPro has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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GoPro (GPRO) Up 6.9% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for GoPro (GPRO - Free Report) . Shares have added about 6.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is GoPro due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
GoPro Q2 Loss Narrower Than Expected
GoPro reported a second-quarter 2024 non-GAAP loss of 24 cents per share, narrower than the Zacks Consensus Estimate of a loss of 25 cents. The company incurred a loss of 5 cents per share in the year-ago quarter.
GoPro generated revenues of $186 million, down 23% year over year. The figure exceeded company’s guidance of $170 million (+/- $5 million). The top line beat the consensus mark by 9.2%.
Higher demand for the HERO12 Black camera in Europe and North America cushioned the top-line performance.
Quarter in Details
GoPro shipped 576 million camera units in the reported quarter, down 18.2% year over year.
It recorded 2.53 million subscribers, marking 4% year-over-year growth. Management envisions subscribers at 2024-end to be 2.6 million.
Region-wise, revenues from the Americas totaled $88.7 million (47.6% of total revenues), down 27% from the prior-year levels. Revenues from Europe, the Middle East and Africa of $64.5 million (34.6%) declined 3% year over year. The Asia Pacific generated revenues of $33 million (17.8%), down 38% on a year-over-year basis. Sales from the Americas and Asia-Pacific regions were affected primarily by consumer-related macroeconomic troubles, especially in China.
Based on channels, revenues from GoPro.com of $49.1 million (26.4%) plunged 35.1% year over year. Our estimate was pegged at $30.6 million.
In this channel, hardware revenues totaled $22.8 million compared with $51.2 million in the prior-year quarter. Subscription revenues amounted to $26.3 million, up 8% year over year.
Retail channel registered revenues of $137.1 million (73.6%), which fell 17.1% year over year. We estimated the metric to be $139.6 million.
It added 800 new retail doors across all regions, especially EMEA and Latin America. Management noted that GoPro added more than 5,000 new retail doors since the second quarter of 2023. It further added that the company remains on track to add another 3,000 to 6,000 new doors by the end of 2025 to boost its go-to-market capabilities for GoPro’s product roadmap.
The company had $97.3 million in inventory compared with $135.4 million in the year-earlier quarter.
Other Details
Gross profit of $56.7 million decreased 25.2% year over year. Total operating expenses of $103.2 million rose 5% year over year. Operating loss totaled $46.5 million compared with $22.5 million in the prior-year quarter.
Non-GAAP gross margin came in at 30.7% compared with 31.6% in the year-ago quarter.
Adjusted EBITDA loss was $33.4 million compared with $10.3 million a year ago.
Cameras with suggested retail prices at or above $400 contributed 76% to revenues in the reported quarter compared with 75% in the prior-year quarter.
Cash Flow & Liquidity
In the quarter under review, GoPro generated $0.6 million of net cash from operating activities compared with $7.852 million of cash used in the year-earlier quarter.
As of Jun 30, the company had $133 million of cash and cash equivalents with $92.9 million of long-term debt.
Guidance
For the third quarter of 2024, revenues are estimated to be $255 million (+/- $5 million). Non-GAAP adjusted loss is forecasted to be 5 cents per share (+/- 2 cents).
Gross margin is anticipated to be 34% (+/- 50 basis points). Gross margin performance is expected to be driven by new product sales, increasing subscription and service revenues and improving product costs, partly offset by higher promotional activity.
Street ASP is projected to be $300.
It expects a further delay in the launch of a new entry-level camera into 2025 instead of the fourth quarter of 2024. The delay in launch will have a negative impact of $20-$25 million in the fourth quarter of 2024 relative to earlier guidance. The cumulative effect of delayed product launches for 2024 revenues is projected to be $100 million.
As a result, it now expects units to be between 2.6 million and 2.7 million compared with 2.85 million projected earlier. Revenues in 2024 are anticipated to be in the range of $850-$870 million compared with the earlier projection of slightly higher than $900 million.
Apart from the delays, muted consumer spending in the absence of promotional activity, declining camera sales at GoPro.com, global macroeconomic concerns, forex volatility (China and Japan) and increasing competition remain headwinds. The company is on track to launch two new cameras in September 2024 – including the new $199 HERO camera.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -4000% due to these changes.
VGM Scores
At this time, GoPro has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, GoPro has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.