Shares of GoPro Inc (NASDAQ:GPRO) jumped nearly 3% to an intraday high of $10.40 on Wednesday after the action-camera maker said Black Friday sales for its cameras jumped 35% at leading U.S. retailers on a year-on-year basis, and up 33% on the company’s website.
In a press release, GoPro founder and CEO Nicholas Woodman said: “We have a lot of work to do to finish the quarter and our fiscal year, however our Hero5 [the company’s latest action camera launched on Oct. 2] [has] been very well-received by critics and consumers alike.”
GoPro described holiday quarter sales of its new Hero 5 cameras as “solid” so far with Woodman noting that his company is “headed into 2017 with a powerful global brand, [its] best ever products, and a clear roadmap for restored growth and profitability in 2017.”
According to the NPD Group, since the launch, Hero5 Black has been the top-selling Digital Imaging device in the United States.
But the real catalyst for GPRO’s upside was buried further down the press release. The San Mateo, Calif.-based firm said it had begun a company-wide restructuring that will reduce some $650 million worth of non-GAAP costs in fiscal-year 2017. The move includes plans to close its entertainment division and reduce its workforce by about 15%. GoPro, which had 1,722 employees at the end of the third-quarter, estimates $24 million to $33 million charge in restructuring for Q4, a move that includes eliminating more than 200 full-time jobs, canceling hiring for open positions as well as the departure of president Tony Bates, who will leave at the end of the year.
GPRO Stock Action
Shares of GoPro closed 1.53% higher at $9.98 on Wednesday. Despite today’s gains there’s still reason to be worried about the company’s stock, including the fact that shareholders are still left with a company with a single product line in a market that gets highly competitive by the minute. Furthermore, on key valuation measures, GPRO shares seem to lack. The issue is currently priced at (4.11)x this year’s forecasted earnings and (45.6)x in forward P/E basis. Current year EPS growth estimates stand at (295%) compared to the industry growth rates of 17.20%. Meanwhile, t-12 profit and operating margins currently print at (31.23) and (34.88%), respectively.
GPRO has a t-12 price/sales ratio of 1.28. EPS for the same period registers at ($2.44).
GoPro shares have declined 27.72% in the last 4 weeks and 33.85% in the past three months. Over the past 5 trading sessions the stock has lost 0.81%.
The $1.42 billion market cap company has a median Street price target of $10 with a high target of $15.
GPRO stock is down nearly 52% year-over-year, and 45.42% since the beginning of the year.