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GoPro & Jabil Enter Into Technology & Equipment License Deal

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GoPro, Inc. (GPRO - Free Report) recently announced a global, equipment license and multi-year technology agreement with Jabil Inc. (JBL - Free Report) . The collaboration will make innovative, GoPro enabled products and services available from some of the well-known hardware and software companies.

The partnership will enable Jabil to leverage GoPro's advanced reference design and IP for producing camera lens and sensor modules, which will be incorporated into GoPro-approved third-party products and solutions. The collaboration will encompass a range of products and services offered by each company including certain digital imaging as well as consumer products. Notably, the agreement builds on the company’s longstanding relationship with Jabil to offer high-quality, advanced products to customers.

Existing Business Scenario

The past few years have not been a smooth ride for GoPro and its troubles are far from ending. Multiple layoffs, operational stumbles, decaying fundamentals and a bad track record of missing targets have hurt the company’s brand image in the market. Moreover, of late, the company’s market share has been threatened by lower-cost alternatives from established industry players as well as new entrants. Not surprisingly, this Zacks Rank #5 (Strong Sell) stock has lost a whopping 57.3% in the past six months against the industry’s rally of 19.9%.

 

The company recently decided to shut down its drone business, as Karma was facing tremendous competition and a hostile regulatory environment in Europe and the United States.

Further, in recent times, the company’s top-line has also been affected by price reductions, despite strong marketing support for key products. Late in 2017, the company slashed prices for the Hero 5 Black and Hero 5 Session cameras. It also cut the price of its latest camera, HERO 6 Black, to $399 from $499. The constrained demand and price cuts are likely to impact the top line in the coming quarters as well. This apart, high product concentration risk and product cannibalization are likely to drag down the company’s top-line performance in coming quarters as well.

Stocks to Consider

Some better-ranked stocks from the same space are MCBC Holdings, Inc. (MCFT - Free Report) and AMC Networks Inc. (AMCX - Free Report) . While MCBC Holdings sports a Zacks Rank #1 (Strong Buy), AMC Networks carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

MCBC Holdings surpassed estimates twice in the trailing four quarters, with an average positive earnings surprise of 4.6%.

AMC Networks outpaced estimates in the preceding four quarters, with an average earnings surprise of 24.3%.

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