In checking the news the last few days, I have
come across some articles about the stock price of GoPro. In case anybody reads
this blog, and I can fully understand that not many do especially considering
how long it has been since I posted something new on here, you may remember
that during the summer of 2014 I posted
two articles about the GoPro IPO. I was making obvious references to the fact
that the market had lost touch with reality, and that there was some absurd
hype driving the price to unrealistic levels. The IPO was done at $24, and I
had been saying that perhaps $ 12 would have been a more realistic value at the
time.
Well, here is an article posted on Money
Morning. Looks like their Chief Investment Strategist now agrees as he claims
the stock not to be worth more than $ 15:
Why the
GoPro Stock Price Dropped 17% This Week
(Nasdaq:
GPRO)
By KYLE
ANDERSON, Associate Editor, Money Morning • @KyleAndersonMM • October 30, 2015
The
GoPro stock price was down another2% in early trading this morning (Friday). GoPro
Inc. (Nasdaq: GPRO) stock has now dropped 16.7% from Wednesday's closing price
after the company missed on top and bottom line estimates for Q3 earnings. On
Wednesday, GoPro reported earnings per share (EPS) of $0.13 on revenue of $400.3
million. Those fell short of estimates of $0.29 per share on revenue of $433.6 million.
The
company also revised Q4 earnings down from previous estimates. GoPro now expects
earnings per share between $0.35 and $0.45 for Q4. That's down from previous
estimates near $0.82 per share.
Revenue
is also expected to be dismal in Q4, between $500 and $550 million. Analysts
surveyed by Thomson Reuters previously called for $690 million. After the lackluster
earnings report, the GoPro stock price is now hovering just above $25. That
means the stock has fallen more than 63% in the last year. And while some investors
may consider buying into GoPro stock at this low price, we do not recommend
buying shares of GPRO.
In
fact, Money Morning Chief Investment Strategist Keith Fitz-Gerald says GoPro stock
isn't worth more than $15 per share. And the rise we saw in the GoPro stock price
to a high of $98.47 in October 2014 was nothing more than media-fueled speculation.
"Driven
by hype and very clever investment banking, stocks that are breathlessly celebrated
by Wall Street often have terrible fundamentals and little or no promise of ever
enriching anybody except their founders and early VC investors,"
Fitz-Gerald said. "Yet they rise like a rocket after their initial public
offering, luring millions of investors to their financial demise."
And
while we recommend keeping GoPro stock out of your portfolio, there is still a way
for investors to profit from the GoPro stock price at today's levels.
Sometimes it is nice to say “I told you so!”…..
