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In a concerted effort to tackle the coronavirus crisis, GoPro, Inc. (GPRO - Free Report) yesterday announced restructuring measures that will help it become a more efficient direct-to-consumer-centric business. Management at this San Mateo, CA-based company decided to cut more than 200 jobs, shift sales operation to market digital adventure cameras directly to consumers and withdraw 2020 financial guidance. GoPro’s shares tumbled 13.6% on the news in the last trading session.
The action video camera maker’s global distribution network has been severely impacted by the COVID-19 pandemic. So the operational changes, staff reductions of more than 20% and cuts to office space are estimated to save $100 million in 2020 as well as limit expenses to $250 million in the next year. GoPro also stated that chief executive officer Nicholas Woodman will waive the remainder of his salary through the end of 2020.
GoPro stated that these reductions will not impact its 2020 product roadmap, which includes new hardware, software and subscription products. In 2019, GoPro.com attracted an average of seven million visitors each month and generated more than 20% of revenues in top Europe markets as well as almost 20% in the United States. Its website gained more ground in the preceding quarter and saw considerable sales growth in all regions year over year.
That said, the company will continue to sell to select leading retailers in key regions where consumers still prefer to purchase offline. It will be shifting primarily to consumer-direct sales to drive growth in regions where GoPro.com has a strong market share. GoPro has appointed Aimee Lapic as its chief digital officer. The company believes that a more direct-to-consumer-centric approach is better aligned with the present business climate as well as accretive to the average selling price of products and gross margin. This, in turn, will enable the company to position itself well when demand begins to normalize.
Further, GoPro is withdrawing its first-quarter and 2020 financial guidance. The company now expects revenues of about $119 million, which was previously estimated in the range of $140-$260 million. It anticipates an adjusted loss in the mid-30 cents a share. As of Mar 31, cash and equivalents are projected to be $125 million.
The restructuring of GoPro’s business will result in an estimated charge of $31 million to $49 million. It sold 700,000 cameras in the first quarter. We will get a clearer picture of the state of affairs once the company reports its first-quarter results, scheduled in May.
GoPro’s shares have lost 30% compared with 1.7% decline of the industry in the past six months.
Ooma has a trailing four-quarter positive earnings surprise of 124%, on average.
Turtle Beach has a trailing four-quarter positive earnings surprise of 112.5%, on average.
Plantronics has a trailing four-quarter positive earnings surprise of 27.7%, on average. The company’s earnings beat the Zacks Consensus Estimate in three of the last four quarters.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Image: Bigstock
GoPro Provides Preliminary Results, Withdraws 2020 Guidance
In a concerted effort to tackle the coronavirus crisis, GoPro, Inc. (GPRO - Free Report) yesterday announced restructuring measures that will help it become a more efficient direct-to-consumer-centric business. Management at this San Mateo, CA-based company decided to cut more than 200 jobs, shift sales operation to market digital adventure cameras directly to consumers and withdraw 2020 financial guidance. GoPro’s shares tumbled 13.6% on the news in the last trading session.
The action video camera maker’s global distribution network has been severely impacted by the COVID-19 pandemic. So the operational changes, staff reductions of more than 20% and cuts to office space are estimated to save $100 million in 2020 as well as limit expenses to $250 million in the next year. GoPro also stated that chief executive officer Nicholas Woodman will waive the remainder of his salary through the end of 2020.
GoPro stated that these reductions will not impact its 2020 product roadmap, which includes new hardware, software and subscription products. In 2019, GoPro.com attracted an average of seven million visitors each month and generated more than 20% of revenues in top Europe markets as well as almost 20% in the United States. Its website gained more ground in the preceding quarter and saw considerable sales growth in all regions year over year.
That said, the company will continue to sell to select leading retailers in key regions where consumers still prefer to purchase offline. It will be shifting primarily to consumer-direct sales to drive growth in regions where GoPro.com has a strong market share. GoPro has appointed Aimee Lapic as its chief digital officer. The company believes that a more direct-to-consumer-centric approach is better aligned with the present business climate as well as accretive to the average selling price of products and gross margin. This, in turn, will enable the company to position itself well when demand begins to normalize.
Further, GoPro is withdrawing its first-quarter and 2020 financial guidance. The company now expects revenues of about $119 million, which was previously estimated in the range of $140-$260 million. It anticipates an adjusted loss in the mid-30 cents a share. As of Mar 31, cash and equivalents are projected to be $125 million.
The restructuring of GoPro’s business will result in an estimated charge of $31 million to $49 million. It sold 700,000 cameras in the first quarter. We will get a clearer picture of the state of affairs once the company reports its first-quarter results, scheduled in May.
GoPro’s shares have lost 30% compared with 1.7% decline of the industry in the past six months.
GoPro currently has a Zacks Rank #4 (Sell).
A few better-ranked stocks in the broader sector are Ooma, Inc. (OOMA - Free Report) , Turtle Beach Corporation (HEAR - Free Report) and Plantronics, Inc. . While Ooma sports a Zacks Rank #1 (Strong Buy), Turtle Beach and Plantronics carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Ooma has a trailing four-quarter positive earnings surprise of 124%, on average.
Turtle Beach has a trailing four-quarter positive earnings surprise of 112.5%, on average.
Plantronics has a trailing four-quarter positive earnings surprise of 27.7%, on average. The company’s earnings beat the Zacks Consensus Estimate in three of the last four quarters.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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