GoPro Inc shares were down firmly on Thursday morning after the firm’s earnings numbers for the three months through September caused a rift with shareholders. Erinn Murphy, who covers the firm for Piper Jaffray, was quick to downgrade shares in the wake of the earnings report, and Wall Street seems set on punishing the camera maker even more.
At time of writing, in the early morning on the East Coast, shares in GoPro Inc were selling for 24.75 , that’s 18.07 percent lower than the firm’s shares closed at on Wednesday afternoon. Erinn Murphy of Piper Jaffray said that she was Underweight on the the firm’s stock with a price target of $20, down from a Neutral rating with a target of $25.
GoPro shocks Wall Street
Heading into the release of its earnings report on Wednesday, shares in GoPro were trading up strongly. There were rumors that the firm’s stock, held short in huge amounts, could be the site of a short squeeze if earnings came in better than expected. As anyone who bought in with that hope now knows, the opposite happened.
Murphy said that her downgrade came as a result of the higher inventory the firm showed off at the end of September. She said that the trend, which clearly shows difficulty selling products, will keep people away from buying shares, and will likely keep the value of the firm’s stock suppressed for some time.
The question is whether GoPro will be able to execute its growth strategy, which includes drones and more reasons to pick up its action cameras, quickly enough to count on at least some level of support from Wall Street. The massive boom and bust in the price of the firm’s shares since it went public is enough to scar its relationship with Wall Street for some time.
GoPro Inc loses huge support
GoPro was hit with more than one change of opinion in the wake of its earnings report, and it seems that the firm is going to have to deal with a huge amount of Wall Street skepticism going forward.
This time last year, right after the firm released its numbers for the September quarter of 2014, shares in GoPro were heading close to $90. After a year of disappointments, reappraisals and questions about the world economy, those who bought in at highs have lost close to 75 percent of what they put into the stock.
GoPro shares were also downgraded by Cowen & Co right after it released its earnings numbers. Cowen dropped its price target on shares from a bullish $60 to $24 after the firm’s earnings and guidance disappointed. Cowen also changed its rating on shares in GoPro from Outperform to Market Perform.
Dougherty and Co also reigned in its price target on GoPro, though the firm didn’t quite have as a fast to travel. The firm dropped its target on the camera maker form $32 to $30 in the wake of the earnings disaster.