Shares of action camera company GoPro (NASDAQ: GPRO) finally had a good day on Wednesday, climbing as much as 20.9% in trading. Shares closed the day up 17.9%, as investors were impressed by the company’s earnings report and guidance.
GoPro’s third-quarter results were better than expected, despite not being all that impressive. Revenue was down 4% from a year ago to $294.3 million but topped the $281 million that analysts expected. On the bottom line, GoPro reported earnings of $0.04 per share, doubling estimates.
Guidance is what really got investors excited. Management said they expect 2024 shipments to be up over 10% to 3.3 million to 3.5 million units and revenue to be $1.1 billion to $1.2 billion, with gross margin improving from 32% to 37%. That’s all a big improvement — if management can pull it off.
The hope for investors is that GoPro is a good-enough value to be a good investment. The market cap right now is $483 million, and the company has $141.7 million in debt. That could be a great value if the company ends the year with $300 million in cash and grows next year, as management is expecting.
What I have to question is whether management can execute the strategy. They’ve gone from growth plans to shrinking the business to forecasting improving operations. All the while, the stock has dropped because reality has been disappointing. I’m not a buyer today, but I’ll be watching future execution closely.
10 stocks we like better than GoPro
When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now… and GoPro wasn’t one of them! That’s right — they think these 10 stocks are even better buys.
*Stock Advisor returns as of November 6, 2023
Travis Hoium has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
—
Blog powered by G6
Disclaimer! A guest author has made this post. G6 has not checked the post. its content and attachments and under no circumstances will G6 be held responsible or liable in any way for any claims, damages, losses, expenses, costs or liabilities whatsoever (including, without limitation, any direct or indirect damages for loss of profits, business interruption or loss of information) resulting or arising directly or indirectly from your use of or inability to use this website or any websites linked to it, or from your reliance on the information and material on this website, even if the G6 has been advised of the possibility of such damages in advance.
For any inquiries, please contact [email protected]
