The camera manufacturer has been observing a decline in its sales continuously along with dropping share price.
The wearable camera maker, GoPro hit an all-time low when on Wednesday its stock dropped by 8% and was being traded at a share price of $18.86. This rating was followed by a price cut that was made by Piper Jaffray’s analyst Erinn Murphy. Since September the company has been witnessing these low stock prices that have dropped down lower than the company’s IPOs.
Erinn Murphy of Piper Jaffray has shared a new target price for GoPro’s stock which was a decrease in share price from $20 to $15 and a rating of Sell. She is clearly is not too ecstatic about the share of the camera maker. The reason, she stated, for lowing the target price of that an observation was made by her in the past week that on various online websites that price of the GoPro’s products have declined. These websites include Amazon.com Inc., RueLaLa, Groupon and a number of others.
The analyst believe that the gross margin of the company which currently predicted to be in between 45.5% to 46.5% for the quarter could be under pressure. In the past few months, the investors have been quite shaky about the stock of the company and are slowly losing faith in its future. Their reaction is justified too as the share of the wearable camera manufacturer has dropped by 67% in only three months and approximately by 70% in a year’s time. At time point, the stock of the American manufacturer has been trading below its IPO share price of $24, the share price now is 20% lower to the IPO share price.
This decline in the share price was in a way expected as the company is still in a growth phase and it has suffered an all-time low already. In such a brutal tech market, it is bound to see some tough time. The company is being led by Nick Woodman, the CEO; he founded the company 13 years ago and is still only 40 years of age. With all the negative talks about the company, there were a few positives as well, these included the revenue growth which was up by 43% on a year over year basis. Recently, the company also released a new camera which was rather small in size called Hero 4 Session, but even that device didn’t manage to sell well. That was mainly due to the price they charged for the company, and they admitted on charging it at a higher price and also admitted that it was mistake to do so. Now the price of the device has been brought down to $299.99 from an initial price of $399.99.
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