Will GoPro Inc’s (NASDAQ:GPRO) Earnings Grow Over The Next Few Years?
The latest earnings update GoPro Inc’s (NASDAQ:GPRO) released in December 2017 showed that losses became smaller relative to the prrior year’s level as a result of recent tailwinds Below is a brief commentary on my key takeaways on how market analysts view GoPro’s earnings growth trajectory over the next couple of years and whether the future looks brighter. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in. Check out our latest analysis for GoPro
Market analysts’ consensus outlook for this coming year seems buoyant, with earnings becoming less negative, reaching -US$130.88M in 2019. Furthermore, earnings are expected to continue its upward direction, reaching -US$50.86M in 2020, and -US$24.07M in 2021.
While it is helpful to understand the rate of growth year by year relative to today’s level, it may be more insightful evaluating the rate at which the business is rising or falling on average every year. The benefit of this method is that it removes the impact of near term flucuations and accounts for the overarching direction of GoPro’s earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I’ve appended a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 62.09%. This means, we can anticipate GoPro will grow its earnings by 62.09% every year for the next few years.
Next Steps:
For GoPro, there are three pertinent aspects you should further research:
Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Valuation: What is GPRO worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether GPRO is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of GPRO? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
