With online stock trading, it helps to have a clear picture of the product portfolios of companies and how their performance affects their stock value. GoPro ($GPRO) has had trouble making its new Karma drone appear attractive to potential customers, and now it has temporarily stopped shipping its products to Amazon as well. All this has hurt its stock value significantly.
Suspended Amazon Shipping and Declining Stock Value
GoPro ($GPRO) is on a low now. The halted shipping to Amazon ($AMZN) constitutes 12% to 14% of GoPro sales, according to an analyst from Piper Jaffray mentioned in Investopedia. In the past 12 months its stock has seen depreciation of 48.87%. The stock traded at $13.69 per share with a 4.51% intraday decline as on Thursday. The analyst has set a $9 per share price target and an underweight rating. So what’s going on with the company?
A JPMorgan analyst, also mentioned in the aforementioned article by Investopedia, does not share the pessimistic view though. He believes the drop in stock price and the news of the halted shipping presents a buying opportunity. And he also feels that the Amazon channel will be reestablished in November. He has given it a $16-per-share price target with overweight rating.
Anticipation over Hero Session 5 and Karma Drone Fades
GoPro had experienced spike in its stock value when consumers and investors were anticipating the high profile launches of Hero Session 5 and Karma drone. But then, the stock retreated quickly. Now the company is losing money and has, as mentioned before, suspended shipments to Amazon which is United States’ largest online retail platform. Currently there is no reason provided for the suspension. With the absence of a stated cause, one only has to think of this as a wrong step by the management, or some error. And that’s bad for the company’s image in terms of its managerial capability and competence.
Better Competing Product by DJI
Though the GoPro Karma drone had been much hyped, the unveiling of rival company DJI’s Mavic Pro drone, just days after, sapped all the excitement surrounding the former. Mavic Pro is also less expensive than Karma and boasts more intelligent specifications in areas that matter including flight features. That has significantly affected the attractiveness and desirability of the GoPro. And this has undoubtedly reflected on the company’s stock performance as well.
The current low value of the $GPRO stock does make it attractive to buy though, and a company of the stature of GoPro will be engineering ways to bounce back for sure.
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