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GoPro (GPRO) Q3 Earnings: Will the Stock Beat Estimates?
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GoPro, Inc. (GPRO - Free Report) is slated to report third-quarter 2016 results after the closing bell on Nov 3.
In the preceding quarter, the company bucked the trend after a hat trick of negative surprises and posted an earnings beat of 11.1%. Still, on average, the company has missed estimates by 28.6% over the trailing four quarters.
Let’s see how things are shaping up for this announcement.
Factors to Consider
This was a happening quarter for GoPro, as it brought to market its first significant update to its flagship line of action cameras in two years — the new Hero5 Black camera and the smaller, cube-shaped Hero5 Session. The Hero5 is attractively priced ($100 less than the previous version at launch) and boasts several new, interesting features. It’s reasonable to assume that the new camera will spark interest among consumers.
The action camera maker also launched its first drone – Karma. This is likely to open a fresh revenue stream for the company. We believe that Karma will draw huge attraction from consumers as the first drone from an established brand with a huge, loyal fan base and boost revenues for the company.
Presently, GoPRo is developing various types of software solutions and hardware to curtail the complexity of managing, editing and sharing contents on different media platforms. Its decision to emphasize on software solutions that make it more convenient for users to offload, access and edit their content will prove to be a significant step in the right direction for the company. The company’s efforts to improve software solutions, and transform itself from a camera maker to content maker have been quite successful.
In fact, during the quarter, GoPro unveiled an app named Quik, which will enable users to instantly edit GoPro footage on their phones and create short videos for networking sites like Facebook and Instagram. This should bolster the company’s revenues as users shift to paid subscriptions in order to take advantage of the same.
GoPro has had a tough time of late, with ill-timed product missteps & delays, strategic pricing errors, and intense competition from Sony Corporation . However, the action camera maker has done a great job of clearing out channel inventory and streamlining its product portfolio. It has also taken huge strides in developing content distribution and software recently.
Steep declines in sales of the company’s HERO4 session cameras owing to increased adoption of its HERO4 black and silver cameras have been hurting the company’s overall revenues in recent times. GoPro seems to be standing on the edge of a huge turnaround and it depends largely on the success of Hero5 cameras and the Karma drone.
After three quarters of sharp year-over-year revenue declines, GoPro has finally created a product lineup that could potentially reverse the trend. We believe that the new products and software updates will provide a much needed boost to GoPro’s top line.
Our proven model does not conclusively show that GoPro will beat earnings estimates in this quarter. This is because a stock needs to have both a positive Earnings ESPand a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. But that is not the case here as you will see below.
Zacks ESP: Earnings ESP for the company is currently pegged at 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 54 cents.
Zacks Rank: GoPro’s Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP as well to be confident about an earnings beat.
Note that we caution against stocks with Zacks Rank #4 or #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks That Warrant a Look
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Ball Corporation , scheduled to release results on Nov 3, has an Earnings ESP of +5.44% and a Zacks Rank #2.
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GoPro (GPRO) Q3 Earnings: Will the Stock Beat Estimates?
GoPro, Inc. (GPRO - Free Report) is slated to report third-quarter 2016 results after the closing bell on Nov 3.
In the preceding quarter, the company bucked the trend after a hat trick of negative surprises and posted an earnings beat of 11.1%. Still, on average, the company has missed estimates by 28.6% over the trailing four quarters.
Let’s see how things are shaping up for this announcement.
Factors to Consider
This was a happening quarter for GoPro, as it brought to market its first significant update to its flagship line of action cameras in two years — the new Hero5 Black camera and the smaller, cube-shaped Hero5 Session. The Hero5 is attractively priced ($100 less than the previous version at launch) and boasts several new, interesting features. It’s reasonable to assume that the new camera will spark interest among consumers.
The action camera maker also launched its first drone – Karma. This is likely to open a fresh revenue stream for the company. We believe that Karma will draw huge attraction from consumers as the first drone from an established brand with a huge, loyal fan base and boost revenues for the company.
Presently, GoPRo is developing various types of software solutions and hardware to curtail the complexity of managing, editing and sharing contents on different media platforms. Its decision to emphasize on software solutions that make it more convenient for users to offload, access and edit their content will prove to be a significant step in the right direction for the company. The company’s efforts to improve software solutions, and transform itself from a camera maker to content maker have been quite successful.
In fact, during the quarter, GoPro unveiled an app named Quik, which will enable users to instantly edit GoPro footage on their phones and create short videos for networking sites like Facebook and Instagram. This should bolster the company’s revenues as users shift to paid subscriptions in order to take advantage of the same.
GoPro has had a tough time of late, with ill-timed product missteps & delays, strategic pricing errors, and intense competition from Sony Corporation . However, the action camera maker has done a great job of clearing out channel inventory and streamlining its product portfolio. It has also taken huge strides in developing content distribution and software recently.
Steep declines in sales of the company’s HERO4 session cameras owing to increased adoption of its HERO4 black and silver cameras have been hurting the company’s overall revenues in recent times. GoPro seems to be standing on the edge of a huge turnaround and it depends largely on the success of Hero5 cameras and the Karma drone.
After three quarters of sharp year-over-year revenue declines, GoPro has finally created a product lineup that could potentially reverse the trend. We believe that the new products and software updates will provide a much needed boost to GoPro’s top line.
GOPRO INC-A Price, Consensus and EPS Surprise
GOPRO INC-A Price, Consensus and EPS Surprise | GOPRO INC-A Quote
Earnings Whispers
Our proven model does not conclusively show that GoPro will beat earnings estimates in this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. But that is not the case here as you will see below.
Zacks ESP: Earnings ESP for the company is currently pegged at 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 54 cents.
Zacks Rank: GoPro’s Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP as well to be confident about an earnings beat.
Note that we caution against stocks with Zacks Rank #4 or #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks That Warrant a Look
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Avon Products Inc. , slated to release earnings results on Nov 3, has an Earnings ESP of +33.33% and a Zacks Rank #1.You can see the complete list of today’s Zacks #1 Rank stocks here.
Ball Corporation , scheduled to release results on Nov 3, has an Earnings ESP of +5.44% and a Zacks Rank #2.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>