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GoPro (GPRO) Stock Sinks As Market Gains: What You Should Know

Zacks Equity Research

GoPro (GPRO) closed at $5.84 in the latest trading session, marking a -1.52% move from the prior day. This move lagged the S&P 500's daily gain of 1.05%. Meanwhile, the Dow gained 1.02%, and the Nasdaq, a tech-heavy index, added 1.66%.

Heading into today, shares of the action video camera maker had lost 11.09% over the past month, lagging the Consumer Discretionary sector's loss of 4.35% and the S&P 500's loss of 2.76% in that time.

GPRO will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.04, up 126.67% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $301.28 million, up 6.58% from the year-ago period.

GPRO's full-year Zacks Consensus Estimates are calling for earnings of $0.38 per share and revenue of $1.26 billion. These results would represent year-over-year changes of +265.22% and +9.77%, respectively.

Investors should also note any recent changes to analyst estimates for GPRO. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 130.77% higher. GPRO is holding a Zacks Rank of #1 (Strong Buy) right now.

Digging into valuation, GPRO currently has a Forward P/E ratio of 15.6. Its industry sports an average Forward P/E of 13.96, so we one might conclude that GPRO is trading at a premium comparatively.

We can also see that GPRO currently has a PEG ratio of 1.56. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Audio Video Production was holding an average PEG ratio of 1.68 at yesterday's closing price.

The Audio Video Production industry is part of the Consumer Discretionary sector. This industry currently has a Zacks Industry Rank of 16, which puts it in the top 7% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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