Volatility levels in GoPro Inc. (NASDAQ:GPRO) could increase in the coming days as the company posts its fourth-quarter earnings as well as on the unlocking of 76 million shares on February 17. During an interview on CNBC, Pacific Crest research analyst, Brad Erickson, reiterated a sector perform rating on the stock on a potential March upside.
“We run sector checks over the past few weeks and found extremely strong follow through and inventory levels really not replenished here late in January, which we took as a good sign and potentially pointing to March quarter upside. So we did call for a kind of trading call up type opportunity here potentially into the low $60’s in the near term,” said Mr. Erickson.
Wall Street will wait to see if GoPro Inc. (NASDAQ:GPRO)’s margins were affected in any way by a shift of focus to the lower-end market with a $129 camera that was released in the fourth quarter. Erickson expects GoPro to post impressive earnings for the fourth quarter despite struggling on the sale of its recently unveiled $129 camera.
Sales could topple estimates, mostly driven by the sale of HERO4 camera, which is believed to have recorded impressive sales over the holiday season. A strong mix of sales both on the low and high-end market according to Erickson could potentially lead to GoPro reporting an upside on its gross profit, as well as revenue.
GoPro Inc. (NASDAQ:GPRO) has been investing in cutting-edge technology, a move that has only gone to popularize its brands allowing it to sell more products on the premium market. A point of concern has to do with the fact that the stock has not been performing well as the camera space continues to experience an upsurge in competition, which should provide the biggest headwind going forward.
The analyst maintains that GoPro Inc. (NASDAQ:GPRO) remains a long-term play in the market amidst concerns over increased volatility. March should be a defining moment for the company when stability starts to kick in terms of volatility levels.
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