GPRO is tanking and Woodman said outright "our business in the third quarter was clearly more difficult than anticipated." When a high flyer makes statements like these it does not bode will for the stock. Tomorrow will be interesting and a little disturbing I am afraid.
For quite a while it seemed that way. But after the run up to $129 followed by the short seller and then the low projections it may be hard to get traction for sometime. Like many others I felt this stock could do no wrong and the momentum we had was great fun and very profitable. But it is different now. We shall see.
Are GoPro and Ambarella worth an investment at current prices?
Shares of action camera maker GoPro (NASDAQ:GPRO) and its image processing chip supplier Ambarella (NASDAQ:AMBA) have each declined about 40% over the past three months on concerns about slowing demand for wearable cameras. The market downturn exacerbated that pain, as their high valuations further spooked investors.
Granted, GoPro stock was looking bubbly when it soared over $90 per share last October with a forward price-to-earnings of nearly 200 times. The same can be said about Ambarella in June, when it traded at around $120 with a forward price-to-earnings of nearly 60 times. But now that both stocks have fallen out of favor, is it time for investors to swoop in at more reasonable valuations?
GoPro: Growth beyond action cams
GoPro has the first-mover's advantage in the action camera market, which Research and Markets forecasts will grow at a compound annual growth rate of 22.2% between 2014 and 2019. The company's early entry enables it to control over half of the global action cam market, according to IDC, while its rivals fight over single-digit market shares.
Despite fears that better smartphone cameras and cheaper devices would hurt GoPro's growth, the company's revenue soared 72% annually last quarter -- up from 54% growth in the first quarter and 38% growth in the prior year quarter. That growth was fueled by the launch of two new devices -- the HERO+ LCD and HERO4 Session. GoPro isn't expected to launch a new device during the third quarter, yet it still expects revenues to rise 56% annually.
Do you mind telling us why it is going to $20? I have watched this volatile stock for sometime and cannot get over how it has moved. Would like to start a position but with the way the price has declined it seems like a bad bet.