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GoPro (GPRO) Expects to Record Solid Sales in Holiday Season

·4 min read

GoPro, Inc. GPRO expects to ring in the upcoming holiday season with solid sales undeterred by the coronavirus-induced adversities and chip shortages due to supply-chain disruptions. Backed by a direct-to-consumer and subscription-centric strategy, the company expects to generate healthy revenues during this period. This growth momentum is likely to continue in 2022 as well.

GoPro revealed that it has collaborated with its suppliers to ensure an uninterrupted supply of essential raw materials. This, in turn, is likely to safeguard a steady flow of replenished items in the retail stores and online shopping platforms. The company has witnessed an uptrend in the premium category sales, with approximately 98% of about 800,000 cameras sold in the third quarter being above the $300 price tag. The new Hero10 Black camera is also selling incredibly well despite a high price of $499.

Much of the renewed optimism regarding healthy holiday revenues is driven by the solid traction in GoPro Plus subscription service that offers unlimited original quality cloud storage of GoPro footage, no-questions-asked camera replacement and discounts on various mounts and accessories.

In addition, the company is developing various types of software solutions and hardware to curtail the complexity of managing, editing and sharing content on different media platforms. GoPro’s app Quik enables users to instantly edit their GoPro footage on their phones and create short videos for networking sites. The company also launched QuikStories, a new GoPro App feature that automatically copies footage to create a ready-to-share video. Additionally, the company is marketing the combined GoPro and smartphone experience to its existing community, which is focused on out-of-home, paid search and rich media, OTT (over-the-top) videos designed to funnel conversions. These initiatives will likely go a long way toward opening GoPro to a broader audience and expanding its user base.

Moreover, GoPro intends to transform itself from the ‘camera maker’ to ‘content maker’ and has taken proactive steps to solidify its position in the burgeoning virtual reality (VR) market. Its products seem well-positioned to dominate the trending VR market. GoPro has also been focusing on offering its immersive imagery video experience to millions of people worldwide through its GoPro Channel. It has been diligently working toward spreading its popularity across the spectrum through concentrated and successful marketing efforts. At the same, it is making investments in merchandising and retail advertising to drive a more significant brand presence while continuing to innovate. It intends to expand its footprint in emerging markets like India and remains focused on scaling its CRM (customer relationship management) efforts to augment its customer base.

Over the past year, the stock has gained 26.4% compared with the industry’s rise of 21%. We remain impressed with the inherent growth potential of this Zacks Rank #3 (Hold).

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A better-ranked stock in the industry is Sonos, Inc. SONO, sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Sono has a long-term earnings growth expectation of 17%. It delivered an earnings surprise of 177.9%, on average, in the trailing four quarters.

Clearfield, Inc. CLFD sports a Zacks Rank #1. It delivered an earnings surprise of 50.8%, on average, in the trailing four quarters.

Earnings estimates for the current year for the stock have moved up 68.2% since January 2021. Over the past year, Clearfield has gained a solid 168.1%.

Sierra Wireless, Inc. SWIR carries a Zacks Rank #2 (Buy). It has a long-term earnings growth expectation of 12.5% and delivered an earnings surprise of 34.2%, on average, in the trailing four quarters.

Over the past year, Sierra Wireless has gained 9.4%. The company continues to launch innovative products for business-critical operations that require high security and optimum 5G performance.

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