GoPro GPRO recently announced that the company’s subscription service now amassed more than two million subscribers.
The company expects the momentum in subscriber growth to continue as the company plans on adding new functionalities and benefits regularly to the subscription service. The company is planning to launch cloud-based edition functionality by the end of this year. Also, it is planning to roll out a synced experience across mobile, cloud and desktop in 2023.
At present, GoPro’s subscription service provides subscribers with unlimited cloud storage as well as the capacity to upload footage to the cloud directly from GoPro cameras. Subscribers can also avail significant savings on GoPro cameras and a discount of up to 50% off on accessories purchased at GoPro.com.
The service also offers premium editing tools in the Quik App, a private live streaming platform and assured replacement for the damaged cameras.
GoPro, Inc. Price and Consensus
GoPro, Inc. price-consensus-chart | GoPro, Inc. Quote
GoPro’s focus on a subscription-centric model makes sense as subscription revenues ensure a stable and recurring revenue stream. As per the company, the two million subscribers for its subscription service translates into $100 million in annual recurring revenue with a gross margin of 70-80%, thereby having a significant positive impact on the bottom line.
The company is benefiting from expanding its direct-to-consumer business and shifting camera product mix to the high-end. GoPro has been expanding its footprint in emerging markets and is focused on scaling up its customer relationship management efforts. Frequent new product launches are expected to act as tailwinds. It aims to translate healthy momentum in its business along with controlled costs into growth and profitability.
In the last reported quarter, direct-to-consumer revenues increased 9% year-over-year to $95 million and represented 38% of total revenues. Subscription revenues came in at $20.1 million, up 70.3% year over. The company expects direct to customers’ business revenue mix to be in the mid-30% range, almost consistent with 2021.
Weakness in macroeconomic conditions along with inflation and forex volatility continue to be major concerns. Also, big box retailers are shedding inventory which is likely to affect top line numbers.
At present, GoPro has a Zacks Rank #4 (Sell).
Stocks to Consider
Some better-ranked stocks from the broader technology sector worth consideration are Arista Networks ANET, Intuit INTU and Badger Meter BMI. Arista Networks and Badger Meter sport a Zacks Rank #1 (Strong Buy), while Intuit carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for BMI’s 2022 earnings is pegged at $2.30 per share, up 7% in the past 60 days. Badger Meter’s earnings beat the Zacks Consensus Estimate in three of the preceding four quarters, with the average being 12.6%. Shares of BMI have gained 0.7% of their value in the past year.
The Zacks Consensus Estimate for Arista Networks’ 2022 earnings is pegged at $3.99 per share, up 8.4% in the past 60 days. The long-term earnings growth rate is anticipated to be 18.6%.
ANET earnings beat the Zacks Consensus Estimate in the last four quarters, the average being 10.1%. Shares of ANET have increased 43.5% in the past year.
The Zacks Consensus Estimate for Intuit’s fiscal 2022 earnings is pegged at $11.72 per share, unchanged in the past 60 days. The long-term earnings growth rate is anticipated to be 15.6%.
Intuit’s earnings beat the Zacks Consensus Estimate in three of the last four quarters, the average being 16.8%. Shares of INTU have lost 8.4% in the past year.
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