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Wedbush Analyst Averts GoPro Inc. (GPRO)’s Overvaluation Concerns

GoPro Inc. (NASDAQ:GPRO) is a stock of two sides, hated by the investor’s community because of its valuation while on the other hand it is loved by the consumers because of its exciting products. During an interview on CNBC, Wedbush Securities, Michael Pachter admitted to being a mismatch between consumers buying GoPro’s products in masses while the street continues to maintain the overvalued sentiments.

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Despite the concerns, GoPro Inc. (NASDAQ:GPRO) continues to enjoy impressive sales on its line of camera products, led by the low-priced HERO camera that is reportedly selling out in most of the retail stores.

“I think the addressable market for this guys is tens of millions, and I think they are going to sell ten million cameras a year pretty quickly. I think you may see this step up to 6 or 7 million next year 9 or 10 in the next year,” said Mr. Pachter.

The analyst argues that the market has overlooked the fact that GoPro Inc. (NASDAQ:GPRO) products are becoming more mainstream due to their features and capabilities. The cameras continue to be the talk of the industry as they are  waterproof, largely shock proof,  inexpensive  and can hook up to the internet allowing people to post  fine photos on Instagram.

Increased demand for GoPro Inc. (NASDAQ:GPRO)’s camera according to Pachter should allow the company to generate millions of dollars per share and not a dollar a share as initially thought. The go to camera maker has been the subject of valuation concerns in the recent past with Pachter maintaining the stock is fairly valued on the current margins.

“If they are making three or four bux a share it is not expensive at all, and I think I am conservative when I talk about the size of the market. I could see GoPro cameras addressing a market that has 40, 50, 60 million units of demand yet they are not going to get 100% of the market share,” said Mr. Pachter.

Expansion into media is another aspect of the business that should diversify GoPro Inc. (NASDAQ:GPRO)’s business heading into the future and looked upon to avert the overvaluation concerns.


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