competition remain causes for concern/ IN FULL/ GoPro (GPRO) Rallies Despite 4.1M Share Sale by CEO - Analyst Blog
4:45p ET November 19, 2014 (Zacks.com) Print
Shares of portable video camera maker GoPro Inc. (GPRO) rose 2.5% yesterday in spite of the fact that CEO Nicholas Woodman plans to offload approximately 4.1 million shares worth $334 million in a soon-to-be held secondary offering, according to a company filing.
In aggregate, the company intends to offer 12 million shares worth $970 million (based on Monday’s closing price of $81.50) in a secondary offering.
The sale of a chunk of shares seems to indicate the CEO’s intention to book profits. At any rate, investors appear unperturbed, choosing instead to bet on the company’s strong product line, which includes the Hero 4 line of cameras and accessories.
Though the actual factor supporting the share price hike is still not determined, analysts speculate that the company’s stable fundamentals have resulted in the upside.
This California-based portable camera maker had launched its IPO in Jun 2014, and the company’s stock price has doubled since then.
GoPro’s cameras can be attached to moving objects or even people and are specially used by sportsmen or sky divers to capture intricate details of a sporting episode.
The company enjoys a first-mover’s advantage in the high definition portable camera market and its extensive camera portfolio also positions it well to counter fresh competition from new entrants.
GoPro has always been in the news for its stock price volatility brought about by the frequent recommendation changes made by analysts.
While GoPro has a sound business model, the company’s size, limited scope for differentiation and intensifying competition remain causes for concern.
Other Stocks to Consider
GoPro currently has a Zacks Rank #2 (Buy). Some other well-performing companies in the audio/video products segment include Skullcandy, Inc. (SKUL), Alps Electric Co. Ltd. (APELY) and Vuzix Corp. (VUZI).
While Skullcandy and Alpes Electric sport a Zacks Rank #1 (Strong Buy), Vuzix carries a Zacks Rank #2 (Buy).
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