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GoPro: It's Time To Buy

Summary

GoPro has now become cheap enough to buy.

The drone delay isn't that big of a negative, given that guidance remains unchanged. However, management's handling of it was problematic.

There are other bullish factors to consider as well, such as the Hero 5 launch, and the release of various VR tools and photo editing tools.

I believe the company is likely to reward shareholders within a year.

I have been bearish on GoPro (NASDAQ:GPRO) since early 2015, but the time has come for me to change my tune. Investors in the stock have gone from wildly optimistic to extremely pessimistic. The potential upside for GoPro greatly outweighs the downside at this point. The company is currently trading at slightly above its 52-week low, and estimates and earnings have come way down.

Their most recent earnings were mixed, with a miss on EPS and a beat on revenue, but investors seemed happy enough at first, sending the shares up after hours. A large part of this initial happiness was due to very low expectations, given how much camera demand has fallen and the lack of new camera products from GoPro. Investors know that GoPro's cameras aren't doing so well right now. However, what's caused an over 20% fall in GoPro's stock price was the delay of their new drone product, the Karma.

Honestly, management seemed to have really botched the handling of it, which is largely to blame for the stock's price decline. Management stated:

As late as this week, we believed Karma's launch was on schedule. However, Karma includes revolutionary features that differentiated from other drones. Features that make...


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