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Strength Seen in GoPro (GPRO): Can Its 9.6% Jump Turn into More Strength?

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GoPro (GPRO - Free Report) shares soared 9.6% in the last trading session to close at $10.75. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 19.9% gain over the past four weeks.

GPRO’s rally is largely driven by optimism over its subscription-centric, consumer-direct business model strategy, which has been specifically designed to translate healthy momentum in its business along with controlled cost into growth and profitability. Moreover, with an augmented subscriber base, the company is striving to gain a competitive advantage by launching its premium products as bundled offerings in the global market, which makes it well positioned to boost its long-term profitability supported by effective business transformation initiatives.

Price and Consensus

Price Consensus Chart for GoPro

This action video camera maker is expected to post break-even quarterly earnings per share in its upcoming report, which represents a year-over-year change of +100%. Revenues are expected to be $187.2 million, up 56.8% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For GoPro, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on GPRO going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

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