GoPro (GPRO) Shares Dive 15% Despite Q2 Beat

GoPro, Inc. (GPRO) was one of Friday’s notable stocks in decline, down 14.59% to $40.97. The nosedive came after the maker of wearable HD cameras filed its first earnings report since its IPO in late June, beating Wall Street estimates on a non-GAAP basis on both the top and the bottom line. Quarterly EPS of $0.08 were $0.01 higher than expectations and up from a $0.03 loss a year earlier. Revenue rose 38.1% year-over-year to $244.6 million, beating also estimates of $238 million. But despite the beat and a quarterly strong sales growth driven primarily by the increased penetration of the Hero3+ Black Edition and accessory products, many investors remain skeptical about GoPro’s ability to maintain its leadership position in the market.

GoPro founder and chief executive officer Nick Woodman was optimistic about the volume of quality content generated on YouTube. “We are seeing a tremendous volume of quality content generated by our users and a 200 per cent year-over-year increase in video views on YouTube, which is fueling our virtuous cycle whereby viewership of GoPro content drives sales. Our second-quarter performance demonstrates our users’ continued passion for GoPro’s products, content and brand”, Woodman said in a press release.

He added that the process of creating and sharing new content would help “customers realise why they purchased GoPro, to express themselves in engaging ways”.

At the end of regular trading on Friday, GoPro shares, which have spiked more than 50% since listed at $24/share at the end of June, closed at $40.97. The eqyity lost 14.59%, widening its monthly decline to 16.04%.

GPRO has a market cap of $3.40 billion, and a 52 week range of $28.65 – $49.90.

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