GoPro Inc shares were having another awful day on Monday after Wall Street firm offered new, disappointing opinions on the firm’s business. James E. Faucette of Morgan Stanley said on Monday that shares in the camera maker were worth around $12, while Citi’s Jeremy David, in a report published last Friday, said that GoPro stock was worth around $22.
At time of writing GoPro stock was selling for 16.96, down 11.43 percent for the day’s trading so far. Today’s fall serves to undo a period of optimism hitting the firm’s stock toward the end of last week. The pop, which may have been due to rumors that Apple Inc. was thinking of buying the firm, didn’t last long.
GoPro stock sinks on demand softness
Today’s collapse brings GoPro Inc stock back to levels it was trading at on December 9. That day saw the firm hit its all time low, however, and shares appear to be headed back to that level on Monday morning.
Mr. Faucette, in his report on GoPro stock, said that the firm’s product growth is going to continue to stagnate through the next year, and inventory levels are likely to stay high. Faucette’s report was downright negative on many aspects of the GoPro business. “Almost all retailers we have spoken with are seeing YoY declines in sales, waning interest in the category and product availability mix shifting to lower price points.”
Morgan Stanley’s assessment appears to have had a dramatic effect on the price of GoPro Inc stock on Monday.
Watching GoPro stock crash
Mr. David, once a fervent cheerleader of GoPro stock, had a slightly different take on the firm’s current troubles. He said that “demand for GoPro products is softening,” but there could be some bright spots ahead. Those include “new product launches in 2016,” the firm’s drone and next gen camera, which, in his view “are likely to lead to positive estimate revisions.” Mr. David admits, however that “these launches are still quite a ways off.”
Before publishing his report on Friday, Mr. David had a price target of $75 on GoPro stock, making the cut a very dramatic one indeed. As recently as July Citi was getting more and more bullish on GoPro stock. When he first addressed the firm’s upcoming drone release, Mr. David put a $90 price target on the firm’s shares.
GoPro shares hit an all time high of just over $60 around the time Mr. David’s report was released, but have fallen hard and fast since as demand for the firm’s products appears softer and Wall Street keeps reigning in sales targets for the full year. As GoPro stock repeats all time lows, it’s not clear what it will take to bring confidence in the firm back to Wall Street.
What is clear is that whatever Wall Street’s premier research houses saw in the firm earlier on in 2015 is no longer there. Action cameras are not going to be the next big thing, and GoPro Inc is the ruler of a market tat’s confined to a relatively small size.