|Bid||4.7500 x 3000|
|Ask||4.7600 x 4000|
|Day's Range||4.6200 - 4.8500|
|52 Week Range||3.6200 - 7.6450|
|Beta (3Y Monthly)||0.34|
|PE Ratio (TTM)||N/A|
|Earnings Date||Oct 30, 2019 - Nov 4, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||6.00|
(Bloomberg) -- Sign up for Next China, a weekly email on where the nation stands now and where it's going next.In Shenzhen’s glitzy financial district, a five-year-old outfit creates a 360-degree sports camera that goes on to win awards and draw comparisons to GoPro Inc. Elsewhere in the Pearl River Delta, a niche design house is competing with the world’s best headphone makers. And in the capital Beijing, a little-known startup becomes one of the biggest purveyors of smartwatches on the planet.Insta360, SIVGA and Huami join drone maker DJI Technology Co. among a wave of startups that are dismantling the decades-old image of China as a clone factory — and adding to Washington’s concerns about its fast-ascending international rival. Within the world’s No. 2 economy, Trump’s campaign to contain China’s rise is in fact spurring its burgeoning tech sector to accelerate design and invention.The threat they pose is one of unmatchable geography: by bringing design expertise and innovation to the place where devices are manufactured, these companies are able to develop products faster and more cheaply.“Ninety percent of the world’s headphones are produced in China, 90% of China’s headphones are produced in Guangdong, and 90% of Guangdong’s headphones are made in Dongguan,” explains SIVGA co-founder and product chief Zhou Jian, an 18-year audio industry veteran who has done work for global brands like Sennheiser Electronic GmbH & Co., Sony and Bose. His company is based in Dongguan because, he says, “Dongguan’s industrial chain is near perfect.” Zhou estimates there are hundreds of specialist factories in the area focusing on a particular component, such as screws, and his network of contacts among those suppliers has been invaluable. It was “support from these good friends” that got SIVGA, short for Sound Impression Via Genuine Artwork, off the ground.Now employing more than 30 people and offering a premium brand called Sendy Audio, SIVGA sells a luxury pair of $599 headphones called Aiva. Featuring handcrafted wooden ear cups and intricately detailed metal grilles, the Aiva have shipped more than 2,000 units into a niche, high-margin market that’s usually reserved for U.S. boutique outfits like Audeze and Campfire Audio. “As far as we know, we are the only company in Dongguan with a woodworking department,” Zhou says, while also pointing out that at SIVGA “the development time is short and many decisions can be made on the spot.” This instant design responsiveness is a signature feature of China’s new tech upstarts, and Zhou sums it up with an old Chinese proverb: “small boats change course easier than big boats.”DJI is the pioneer that proved Chinese tech companies could aspire to be more than just manufacturing contractors or fast copiers. “DJI leads the industry with features like automatically avoiding obstacles in flight, which it implemented first,” notes Techsponential lead analyst Avi Greengart. “Rivals in the U.S., France and Taiwan have not been able to catch up.” DJI’s lead is based on the same geographic synergies as SIVGA’s. When a U.S. rival suffers a manufacturing hitch or defect, its ability to identify and react to the problem is hampered by the distance between its designers and manufacturers. DJI doesn’t have that problem, which has helped propel it to being the top drone maker in the world.“These are Chinese companies that want to be industry leaders and innovators. DJI and Insta360 are perfect examples of that movement,” says Anshel Sag, mobile industry analyst for Moor Insights & Strategy. “A big part of it comes from the entrepreneurial spirit of Shenzhen.”Like Dongguan, which this year saw a large new Huawei Technologies Co. campus open, Shenzhen is a nexus of component makers and suppliers eager to find new customers for their wares. The cacophonous Huaqiangbei bazaar in the city exhibits a wild array of gadgets from smartphone-electric shaver hybrids to neon-lit unicycles with Bluetooth speakers. That commoditized fray offers inspiration but also an impetus to rise above it with genuine innovation. The successful companies are the ones who make the most of the rabid production and iteration around them.“In Shenzhen, there’s a well-established supply chain system,” says Insta360 founder Liu Jingkang. “From a research perspective, in-house R&D may only contribute 60% of a product, the rest needs to be finished in factories.” The CEO of OnePlus, another company based in the city, has expressed pride in its ability to prototype new devices at great speed because he’s just a 45-minute drive away from its assembly lines.Even without being Apple Inc., Chinese companies are now building world-class, premium products, though China’s signature feature of undercutting the established market remains. Whether or not a Chinese company is first to a technology, it makes sure to be first to a breakthrough price.Backed by Xiaomi Corp. in 2014, Huami is responsible for creating the massively popular Xiaomi Mi Band, which has flooded the China market at a $20 price. The Mi Band offers most of the features of a Fitbit fitness tracker — including step counting and heart-rate monitoring — at a fraction of the cost. After expanding to sales in the U.S. and launching its own Amazfit brand, Huami is now shipping in excess of 5 million devices per quarter, and its chief executive talks openly about “taking out” at least some of its larger rivals, including Apple and Samsung Electronics Co.“The operating models for Garmin and other European and U.S. smart device vendors are flawed. Their retail price is very high,” Huami CEO and founder Wang Huang says. “You will only be able to sell very expensive products to a very small group of customers because mainstream and lower-end markets will be eroded by companies like us.”Evidence for the Huami chief’s words abounds in the smartphone market, where the top group of manufacturers is increasingly dominated by Chinese names like Xiaomi, Oppo and Huawei. 2018 saw these brands make major inroads into the European market, relying on better pricing and faster feature introductions. Xiaomi “consistently produces budget flagship phones with first-to-market implementations,” says Techsponential’s Greengart. Along with SIVGA, Huami and Insta360, they’re following in the footsteps of companies like Lenovo Group Ltd., which was among China’s early breakout successes after buying IBM Corp.’s PC business in 2004. Their global ambitions and innovation pose a serious threat to the leadership of a plethora of U.S. tech products in areas from design to functionality, whether they be GoPro cameras, Apple iPhones or HP laptops.China’s rapidly rising tech creators are not without commercial savvy. Many of them are planning to seek capital on Shanghai’s new trading venue for startups, locally known as the Star board. Ninebot Inc., the Xiaomi-backed outfit that acquired Segway in 2015, aims to raise $300 million there. In unicorn territory, the Google-backed Mobvoi, which creates natural language translation algorithms for its Wear OS smartwatches, is also said to be seeking a high-value listing on the Star market.Royole, the startup that earned a measure of notoriety by beating Samsung to selling the world’s first foldable device in 2019, has managed to secure a deal with Louis Vuitton that will see the two companies putting flexible screens on handbags of the future. Like Huami initially leaning on the Xiaomi brand to build itself up, Royole stands a chance to be a luxury goods player with the help of a bigger company. The differences between California’s Silicon Valley startups, which have tended to do a better job of marketing and deal-making, and China’s new generation of homegrown businesses are gradually disappearing.How and Why the U.S. Says China Steals Technology: QuickTakeAmerican critics, such as President Donald Trump, commonly point to a track record of Chinese companies copying features from abroad, and one of their bits of evidence is the way Apple’s iPhone software and design seem to be habitually recreated by Huawei, Xiaomi and others. There’s not much that a Western company can do in such situations. When Segway filed a complaint against a number of Chinese brands for IP violations, it ended up conceding the fight and getting acquired by one of its defendants.The observable change now is that a new generation of innovative companies aren’t waiting for someone else to show them the blueprint. China’s rapid ascent in innovation goes beyond anecdotal evidence from startups like DJI and Huami, and the country’s corporations now rank among the world’s most prolific patent applicants.“The trend of China moving to high-end manufacturing, research and design is unstoppable,” said Jia Mo, a Shanghai-based analyst with consultancy Canalys.To contact the reporters on this story: Vlad Savov in Tokyo at firstname.lastname@example.org;Gao Yuan in Beijing at email@example.com;Lulu Yilun Chen in Hong Kong at firstname.lastname@example.orgTo contact the editors responsible for this story: Peter Elstrom at email@example.com, Vlad Savov, Edwin ChanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
If I was an owner of Apple (NASDAQ:AAPL) stock, I'd be very worried about my investment, partly because there are multiple signs that the company itself is worried about its outlook.Source: George Dolgikh / Shutterstock.com Yesterday Apple revealed that it will only charge $699 for its cheapest new iPhone, "$50 below what many analysts were expecting," according to MarketWatch. Coming after its iPhone revenue dropped meaningfully last quarter, the lower price (AAPL has previously routinely charged $1,000 for some of its new iPhones) indicates that AAPL is worried about further declines in demand for its flagship product.This lower price looks like an admission of weakness. Apple's decision to only charge $4.99 per month for its Apple TV+ content streaming offering, versus the $7.99-$9.99 that the Street was expecting, probably indicates that it does not expect to be able to compete very well with Netflix (NASDAQ:NFLX) and Disney (NYSE:DIS), given its limited content. Marketwatch made that point, which I've warned about in the past.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Stocks to Sell in Market-Cursed September In addition to being tacit admissions of weakness, the pricing decisions will, of course, have negative implications for Apple's bottom line. And in combination with tariffs, the low iPhone price will probably significantly cut into its margins. Moreover, the low price point of the streaming product will likely turn it into a loss leader for the foreseeable future.Far from rescuing Apple stock, as many analysts and pundits had anticipated, the streaming offering actually looks poised to weigh on the company's bottom line. Cook's Largely Overlooked Sale of Apple StockOn Aug. 24, Apple CEO Tim Cook received 560,000 shares of Apple stock. However, according to Barron's, "Apple withheld 294,840 shares to satisfy tax-withholding requirements." On Aug. 26, Cook sold all of the Apple stock he was eligible to unload from the shares he had received two days earlier, for $54.7 million. Cook's decision to sell every share he could out of the Apple stock he was awarded on Aug. 24 doesn't show too much confidence in the outlook of AAPL stock. The New iPhones and More Trouble on the WayThe main attraction of the new iPhones seem to be their highly-advanced cameras. If tens of million of American consumers were willing to pay a great deal for highly advanced cameras, GoPro (NASDAQ:GPRO) stock would be trading around $200 per share, instead of around $4.60 per share. So I don't expect Apple's new iPhones to sell very well.Moreover, the new iPhones lack 5G capability, which could reduce their attractiveness in the eyes of many consumers who are anticipating the new technology.Also likely to weigh on sales of the new iPhones is the foldable phones that Samsung is due to launch Friday. Foldable phones can essentially be made into tablets. Although Samsung will charge $2,000 for its foldable phone, since the device removes the need to have a separate tablet, the price is really not so high. And the foldable phone is way higher on the coolness scale than more advanced cameras. As a result, Samsung's foldable phone, called the Galaxy Fold, is likely to meaningfully lower Apple's smartphone market share and Apple stock.Also likely to continue to hurt Apple's results and Apple stock is competition from lower-priced Chinese-made phones. Apple will face tough competition on the lower end from these Chinese companies and on the higher end from Samsung's foldable phone.Finally, Apple is already making changes in response to the antitrust probe of its competitive practices. More of these changes are likely on the way, and, cumulatively, they probably will weigh on Apple's results and Apple stock.Owners of Apple stock should be afraid at this point. They should probably follow Cook's lead and sell many shares of AAPL stock.As of this writing, the author did not own any shares of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell in Market-Cursed September * 7 of the Worst IPO Stocks in 2019 * 7 Best Stocks That Crushed It This Earnings Season The post Owners of Apple Stock Should Be Afraid appeared first on InvestorPlace.
Over the past month, the S&P 500 (NYSE: SPY) is down almost 3%, but shares of GoPro (NASDAQ: GPRO) have fallen 29% despite a statement from the company that impending tariffs will not impact second half financial results. At the beginning of Aug., Wedbush analyst Michael Pachter reiterated his Neutral rating on the stock and lowered his price target from $6.00 to $5.50 per share. According to Wedbush, this upcoming fall is a key time for the company's stock.
GoPro (GPRO) shifts the production of most of its U.S.-bound cameras from China to Mexico in the wake of escalating bilateral trade conflict between the world's two largest economies.
As its longstanding lawsuit begins to accelerate, GoPro (GPRO) finds itself with its back against the wall.In January 2015, fellow video production action camera maker Contour sued GoPro, alleging that the firm’s products infringe on two of Contour’s patents. These patents protect the technology that enables content being recorded by a portable digital video camera to be simultaneously transmitted and streamed from a different device, such as a smartphone. GoPro refers to this feature as “wireless capability,” and Contour is seeking permanent injunction against all GoPro cameras that utilize this feature.The first ruling for the case came in October 2016 when the Patent Trial and Appeal Board ruled that GoPro failed to provide sufficient evidence to invalidate Contour’s patents. However, GoPro appealed the case in July 2018 and was granted a stay. Presently, two concurrent cases are at hand that stem from the 2015 lawsuit filed by Contour. The primary case deals with the initial infringement of patents, while the other assesses the validity of the patents themselves.Morgan Stanley's Erik Woodring commented: "While we are not assessing the legal standing of either party's claims, GoPro has now seen their petition against the validity of Contuor's patent struck down by the PTAB twice, which would seem to be a more negative than positive development."As a result, Woodring reiterated an Underweight rating on GPRO stock, but kept his price target at $5.00, which implies nearly 20% upside from current levels."While we expect a conclusion to the patent infringement case to likely be multiple quarters (if not years) away, ultimately we see the risk as skewed to the downside for GoPro given they are the defendant in the case, and therefore could potential be subject to some form of an injunction or monetary compensation in a bear case scenario, and the status quo (perhaps Contour would owe GoPro legal fees, for example) in a best case scenario," Woodring addedAll in all, Wall Street is not rooting for GoPro stock's success, earning a weak analyst consensus rating. TipRanks analytics exhibit GPRO as a Moderate Sell. Based on 3 analysts polled in the last 3 months, 2 rate the stock a Hold, while one calling the stock a Sell. However, the 12-month average price target stands at $6.17, marking over 50% from where the stock is currently trading. Though this may simply be the result of analysts’ inability to turnaround new price targets quickly. (See GPRO’s price targets and analyst ratings on TipRanks).
SAN MATEO, Calif. , Aug. 26, 2019 /PRNewswire/ -- GoPro, Inc. (NASDAQ: GPRO) today reiterated that it does not expect the recently announced tariffs to have an impact on its second half 2019 financial ...
At the end of the day, I’m not sure how large a market there is for a budget “action camera” phone, but in a world of samey electronics, at least the Lenovo-owned brand continues to shade in interesting corners. Honestly, I’m surprised more phones didn’t attempt to position themselves as action devices in the heyday of the GoPro. For most consumers, that trend has largely blown over, and for GoPro itself, it’s become tough to compete with cheap knockoffs and the recent entrance of DJI into the market.
Second-quarter earnings generally were strong. 75% of S&P 500 components, according to Factset Research, posted a positive bottom-line surprise for the quarter. But several stocks in the market -- among them Uber (NYSE:UBER) stock -- fell sharply after weak earnings reports that made them, in many investors' eyes, stocks to sell. * 10 Stocks Under $5 to Buy for Fall These 10 stocks all tumbled after second quarter releases. In some cases, those declines have led to attractive, if high-risk, bull cases. For others, the sell-offs seem like signals of more trouble ahead. In all cases, however, earnings reports mattered -- and will likely color the stories going forward.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Uber (UBER)Source: Shutterstock To be fair, Uber didn't have a terrible quarter. Revenue, adjusted for a one-time driver bonus related to the company's IPO, still increased 26% year-over-year in Q2. And while UBER stock did fall almost 7% the day after earnings, it had gained over 8% the day of the after-close report, thanks to an earnings beat from rival Lyft (NASDAQ:LYFT).That said, UBER stock continued to decline in the following days, losing 21% of its value in just four sessions. That's over $16 billion in lost market value in less than a week. That's almost certainly the biggest loss on an absolute basis in the market this earnings season. UBER now trades at an all-time low, though admittedly it has only been public for just over three months.It's not at all clear that the decline is a buying opportunity. Uber remains unprofitable: its Adjusted EBITDA loss more than doubled year-over-year. UBER stock isn't cheap on a revenue basis, either. Its market capitalization remains over $56 billion, despite the fact that there are real long-term questions about the company's business model.In recent years, we have seen 'hot' IPOs tumble sharply: both Facebook (NASDAQ:FB) and Snap (NYSE:SNAP) come to mind. At least at the moment, UBER stock looks like it could follow that trend. Given that both of those stocks dropped more than 50% from their IPO price, UBER could have further downside ahead. 2U (TWOU)Source: Shutterstock Only one company saw a bigger post-earnings decline, on a percentage basis, then educational technology provider 2U (NASDAQ:TWOU). TWOU shares fell a stunning 65% in a single session the day after its second-quarter earnings report. That decline was topped only by Sanchez Midstream Partners LP (NYSEAMERICAN:SNMP), which dropped 69% and filed for bankruptcy less than a week later.Some investors saw the decline as an overreaction: TWOU shares have bounced 22% since. But there are real risks here.TWOU's guidance badly missed Street estimates on the bottom line -- and the company now is slowing its revenue growth as it focuses on controlling spending. One analyst called the report a "breaking of the company's model." And it's not like TWOU was soaring heading into the release. In fact, the stock posted a one-day drop of 25% after the Q1 release in May, and headed into second quarter earnings down almost 60% from its 52-week high. * 15 Growth Stocks to Buy for the Long Haul That said, for intrepid investors, there's a case to try and time the bottom. TWOU now trades at just 2x revenue. Its role in online education should drive some growth going forward, even if it will lag the 39% year-over-year increased posted in Q2. After the last two quarters, it would take a lot of gumption to own 2U stock into another earnings report. But perhaps, at least, TWOU can't perform much worse next time around. Kraft Heinz (KHC)Source: Shutterstock The disastrous run continued for Kraft Heinz (NASDAQ:KHC) in the second quarter. KHC shares fell 8.6% after earnings and tacked on another 6.1% decline the following day. KHC trades at an all-time low, and from both a short- and long-term standpoint, it's not difficult to see why.Q2 was yet another disappointing quarter. Sales declined 1.5% year-over-year on an organic basis, including a nearly 2% drop in the U.S. Adjusted EBITDA fell 19%; adjusted EPS dropped 23%. And those numbers are a reflection of a longer-term strategy that simply isn't working.3G Capital, with the help of Warren Buffett's Berkshire Hathaway (NYSE:BRK.A,NYSE:BRK.B), put Kraft and Heinz together, while planning to follow 3G's "zero-based budgeting" strategy. That strategy instead has starved Kraft Heinz brands of needed marketing and innovation spend, leading the company to underperform in an already-difficult consumer packaged goods space.There's a case to bet on a turnaround here. I made such a case at the beginning of the year, and many hedge funds have been buyers of late. But KHC's new CEO seemed to suggest no improvements were on the way any time soon -- and the crushing debt load created (in part) by the merger can continue to weigh on the equity here. It may seem incredible, but bond markets now reflect a not-insignificant chance that KHC stock goes to zero. Any investor buying KHC for a turnaround -- or its dividend -- should keep that in mind. GoPro (GPRO)Source: Shutterstock In recent years, investors have fled hardware manufacturers like GoPro (NASDAQ:GPRO). Second quarter earnings reports across the group prove why -- and will make it very difficult for the market to trust the sector any time soon.For GoPro, Q2 numbers weren't that bad. Revenue actually increased roughly 3% year-over-year, though the Street was looking for growth almost double that. Management forecast a strong second half and sounded an optimistic tone toward next year. Meanwhile, the midpoint of EPS guidance suggests GPRO stock trades at a roughly 10x P/E multiple.But investors weren't buying it -- literally. GPRO shares fell 13% after earnings. They're now just shy of an all-time low reached in December. And as I wrote last month, the short case here still seems to hold. GoPro has the action camera market mostly to itself; the problem is that the market simply isn't growing. Execution hasn't been great, and margins are somewhat thin. * 7 Safe Dividend Stocks for Investors to Buy Right Now And at a certain point, investors are going to tire of bidding GPRO up on hopes of a turnaround -- only for the company to disappoint and re-test the lows. In fact, it's likely that most investors already have. Fitbit (FIT)Source: Shutterstock There are more than a few parallels between Fitbit (NYSE:FIT) and GoPro. Both stocks soared after their IPOs (though GPRO stock saw a much bigger bounce), only to reverse to steep and almost uninterrupted declines. The two companies have been undertaking various turnaround strategies -- new products, cost-cutting, etc. -- for years now, none of which really has taken hold. And both firms are looking to subscription revenue as a way to offset the margin pressure on hardware sales.Fitbit, however, has it worse at the moment, in a number of ways. Its stock isn't just challenging an all-time low: it closed at one on Wednesday. FIT dropped 21% following earnings, against the 13% decline in GPRO, after the Q2 release came with a full-year guidance cut. And unlike GoPro, Fitbit isn't a market leader anymore: Apple (NASDAQ:AAPL) clearly has taken the smartwatch crown, with Garmin (NASDAQ:GRMN) also a legitimate player.For GPRO, there is at least is a case that the stock is cheap enough that even some growth can, at some point, drive the stock higher. FIT stock doesn't even have that case. The company does have a ton of cash: some $565 million (including marketable securities) at the end of the second quarter, against a market capitalization below $800 million. But it's also burning some of that cash, with even Adjusted EBITDA guided to a loss for the full year.Given market share erosion, it's hard to see how that reverses. The same is true of Fitbit stock. Arlo Technologies (ARLO)Source: Shutterstock For IP camera manufacturer Arlo Technologies (NYSE:ARLO), GPRO and FIT should have served as cautionary tales. ARLO stock has somewhat followed the same trend as its hardware peers, but the gains were smaller and the declines came much sooner.ARLO now has fallen 82% from its IPO price a little over a year after it debuted on the public markets. That includes an 18% decline after second quarter earnings earlier this month.It could get worse. Given that Arlo was spun off from NETGEAR (NASDAQ:NTGR) on the last day of 2018, it likely can't sell itself before 2021 without creating an enormous tax liability. But the company, at this point, may not be able to survive on its own. It's guiding for an adjusted operating loss in the range of $100 million this year. If that guidance is hit, Arlo will end the year with roughly $100 million in cash.In other words, performance needs to get better -- and quickly -- or else solvency becomes a real concern next year. But sales are declining as is and even that full-year guidance looks at risk. Arlo needs a huge Q4 just to hit its full year outlook -- and must then keep that momentum going into 2020. * 7 Stocks Under $7 to Invest in Now That might be difficult. Competition remains intense. Arlo still is discounting heavily: adjusted gross margin is guided to just 9-12% in the third quarter. The company is relying on the launch of its Ultra 4K camera and a video doorbell to drive sales growth -- but it has basically zero room for error. Arlo needs a huge holiday season this year, or the stock might be at zero before the next one. Groupon (GRPN)Source: Shutterstock It's not just hardware companies that turn into busted IPOs. Groupon (NASDAQ:GRPN) doesn't sell physical products, but it feels a bit like those hardware stocks.GRPN, too, is testing an all-time low after a disappointing earnings report undercut turnaround hopes. It is looking for subscription revenue with the launch of its Groupon Select offering.Groupon at least is profitable -- and has a fortress balance sheet, with almost $400 million in cash net of debt. But revenue is declining, and cost-cutting opportunities likely limited at this point. And the broad problem that I highlighted in April remains. This isn't really a 'tech' company -- not with some 2,000 salespeople on staff. The business model runs through the Internet, but it's not a high-margin platform story like Match Group (NASDAQ:MTCH) or Etsy (NASDAQ:ETSY).Instead, it's a tough, low-margin, labor-intensive business with high customer turnover. It's a business that simply hasn't been able to drive consistent growth. Until that changes, GRPN stock is going to stay cheap. Align Technology (ALGN)Source: Shutterstock A year ago, Align Technology (NASDAQ:ALGN) could do no wrong. Shares of the Invisalign manufacturer were soaring in a hot market. Valuation was a concern, admittedly. But ALGN stock seemed like the kind of stock where investors would keep paying up for its growth.A jittery market ended the rally at the beginning of October. Soft Q4 guidance given with Q3 earnings later that month sent ALGN tumbling. The stock lost more than half its value in the fourth quarter alone. But a new year led to a new rally: by early May, Align Technology stock had risen 58% in 2019.Those gains now are gone. ALGN has fallen 47% and has reversed to a 16% loss for this year. Once again, it was weak guidance that tripped up the stock, as the company cited a slowdown in growth in China and choppy performance among teens in the U.S.ALGN is tempting on the decline. This still seems to be a wonderful business model. Growth should continue, particularly in developing markets. Management remained confident after Q2 that revenue in China would rebound. And while competition is a risk, Align seems the leader in clear aligners -- which should take more share from traditional braces over time. * 7 Stocks to Buy With Over 20% Upside From Current Levels The one catch is that the stock simply isn't that cheap yet. ALGN still trades at 27x 2020 consensus EPS. With fears about the Chinese economy dominating the market, and a "falling knife" stock chart, even investors intrigued by the stock might do well to show some patience. Farfetch (FTCH)Source: nikkimeel / Shutterstock.com There are two common drivers of big downward moves. A company can miss earnings expectations -- or it can make an acquisition with which investors disagree. Luxury marketplace Farfetch (NYSE:FTCH) did both this month -- and its shares declined 44% as a result.The company is spending $675 million to acquire New Guards Group, a so-called "brand platform" that has launched luxury labels. That buy was announced the same day as Q2 results and lowered full-year guidance for GMV (gross merchandise value). So disappointing was Farfetch's outlook that RealReal Inc (NASDAQ:REAL), a used luxury good marketplace, fell 23% in sympathy.FTCH shares have managed to hold a bottom since, however, even in a market seemingly primed to punish luxury sellers. And there's a case that investors can buy an attractive growth story at a much cheaper price. Oppenheimer still sees a clean double. FTCH stock now trades at a more attractive ~4x multiple to 2020 revenue estimates. And the New Guards acquisition is a part of a strategy for Farfetch to develop and sell its own products, in addition to those of other boutiques.In a market where growth stocks still aren't cheap, or close, FTCH looks at least reasonably valued by comparison. And if management's strategy is on point, the post-Q2 declines in retrospect will look like a massive buying opportunity. DXC Technology (DXC)Source: Shutterstock There may not be a better stock for contrarian investors right now than DXC Technology (NASDAQ:DXC), the result of a merger of Computer Sciences Corporation with assets from Hewlett Packard Enterprise (NYSE:HPE).DXC shares are down roughly two-thirds from all-time highs reached in September. The stock trades at less than five times the low end of updated 2019 adjusted EPS guidance -- and barely four times the high end. There are worries, notably in the consulting business. But a sharp sell-off of late, including a 30% one-day decline after second quarter earnings, seems like an overreaction.That said, investors do need to be careful. Selling pressure hasn't let up yet, though weaker broad markets are a factor. DXC does have a decent amount of debt: almost $10 billion against a market capitalization now just above $12 billion. DXC is cheap relative to guidance, but that guidance was cut sharply after the second quarter and could see another reduction before the year is out. Contrarian investing in this market has been difficult, if not dangerous.Still, a sub-5x P/E multiple is attractive. There should be room for cost cuts going forward. Investors need to understand just what they're getting into -- but it's hard to find much in the way of cheaper stocks than DXC.As of this writing, Vince Martin is long shares of NETGEAR. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks Under $5 to Buy for Fall * 5 Stocks to Avoid Amid the Ongoing Trade War * 7 5G Stocks to Buy Now for the Future The post The 10 Biggest Losers from Q2 Earnings appeared first on InvestorPlace.
GoPro stock has tumbled from its high this year, but one hedge fund announced it has acquired a large stake in the maker of action cameras.
What goes up, must come down. At least that’s the case with GoPro (GPRO) stock. Shares of the action-camera company skyrocketed out of the gate, rising as high as 73% between January and May. But today is the opposite story, with the stock plummeting over 40% since May. The company’s recent earnings — released last week — forced shares down 13%, to its lowest point since January. With the recent drop in GoPro's stock price, 3-star Wedbush analyst Michael Pachter is maintaining his Neutral rating and lowering his price target by $0.50, to $5.50. (To watch Pachter's track record, click here) GoPro’s second quarter report showed that revenue and profit increased since last year, but missed estimates. While analysts were expecting revenue of $302 million, the company came about $10 million short, with EPS missing by a penny. The company did raise guidance, but lack of specifics didn’t bode well with investors. Overall, Pachter says that GoPros’s second quarter results were “underwhelming.” The analyst thinks the company’s “turnaround to profitability is well underway in 2019,” but is still “reluctant to recommend shares ahead of GoPro’s next upgrade cycle this fall.” Pachter wants to see management "demonstrate that GoPro is a growth company,” before he makes a move. With the guidance raise, many are expecting GoPro to launch new products, including Pachter. The analyst expects this year’s new fall lineup to include one entry-level low-priced model with an innovative high-end upgrade piece, as well as a new spherical camera. But to the delight of the analyst, GoPro is not releasing a drone. Pachter believes that GoPro is “well-positioned to re-enter” the drone market, but thinks it is wise to stay out of it right now. One of the biggest factors on investors minds is profit. GoPro has shown two consecutive quarters, which has contributed to an improved “investor perception of management’s ability to drive the company back to profitability.” But Pachter thinks the big question is whether or not management can lead “sustainable growth,” with its products and subscription offerings. Amid the question marks, Pachter is lowering his 2019 estimates for revenue and profit.All in all, GoPro has been here before. Last year, shares also plummeted 43%, between November and December, before ultimately climbing out of its hole and rising to one of the highest levels in recent years. TipRanks analysis of four analysts shows that the optimism isn’t dead (it just isn’t alive, either). Analysts are offering a consensus "Hold" rating on shares of GoPro, with one analyst suggesting Buy, two recommending Hold and one advises Sell. The average price target among these analysts stands at $6.88, which represents ~56% upside from current levels. (See GPRO’s price targets and analyst ratings on TipRanks)
Healthy sell-through momentum, channel inventory levels and strength of new products drive GoPro's (GPRO) second-quarter financial performance.
GoPro stock (GPRO), up 18% in 2019 through Thursday’s close, was down 14% to $4.32, with an intraday low of $4.31, not far from the stock’s 52-week low of $4. On a conference call Thursday night, the company offered optimism about the balance of the year, pointing investors toward full-year revenue of $1.25 billion, to $1.28 billion, with year-over-year growth substantially more aggressive than previously forecast. “We ended up right where we wanted to be, and our momentum continued through July,” CEO Nick Woodman said on Thursday’s call.
Morgan Stanley's Erik Woodring maintained an Underweight rating on GoPro with an unchanged $5 price target. GoPro's second-quarter EPS and revenue fell slightly short of expectations, but this was offset by management's revised outlook for the back half of 2019, Morgan Stanley's Woodring said in a Friday note.
Shares of beleaguered action-camera company GoPro rose in after-hours Thursday after issuing an upbeat outlook despite missing quarterly earnings estimates. The company reported an adjusted profit of 3 cents a share in the second quarter vs. a loss of 15 cents in the same period a year ago.