GoPro Inc (NASDAQ:GPRO) Quietly Resumes Karma Drone Sale After Recall
Feb 04 2017 by Harriet Stone
But more than the mixed earnings, it was the disappointing outlook which did the damage. AQR Capital Management LLC now owns 3,170,390 shares of the company's stock worth $34,272,000 after buying an additional 1,190,470 shares in the last quarter.
The idea of capturing and sharing 360-degree image or video content is incredibly appealing, and GoPro has indicated it's going to try to be a leader in the market.
GoPro is a company that changed the market of action cameras for good. Vanguard Group Inc. raised its position in shares of GoPro by 6.7% in the second quarter.
GoPro, Inc.'s (GPRO) stock price escalated 3.78% to finalized at $10.97 throughout previous buying and selling session. It projects revenues for the current quarter in the range of $190-$210 million, which is well below the Zacks Consensus Estimate of $268 million for the quarter. The High end of the forecast is $-0.14/share, while the Low end is $-0.35/share.
"GoPro voluntarily withdrew Karma in November 2016 after a small number of cases where batteries disconnected during flight, resulting in a loss of power", the company explained in a press release.
The company notes the $0.82 per share loss includes charges of $102 million for a full valuation allowance on US deferred tax assets and almost $37 million for restructuring costs. GoPro presently has a consensus rating of Hold and an average target price of $14.28. GoPro also took $37 million restructuring charges, mostly related to closing down of its media business and laying off 1/3rd of its workforce.
GoPro CEO Nick Woodman confirmed the news himself, saying during the call that there will be new "cameras" coming out this year, one of which is the HERO6. The company had Year Ago Sales of 436.6 Million.
Forbes said the GoPro Karma initially launched past year, but the device appeared to be faulty, with first-mover customers experiencing (and documenting) the problem.
To be fair, it's hard to measure how much that missed marketing opportunity hurt sales.
GoPro (GPRO) plans to relaunch its camera-based drone, Karma, later this year. Also, the competition in this segment is intensifying.
But more than the current earnings, it was the Q1 2017 guidance which disappointed the investors. On January 24, GoPro stock rose over 8% after Pacific Crest analyst Brad Erickson mentioned increased shipments of the Karma drone are expected to drive GoPro's revenue this year. But it did GoPro no favors happening ahead of the crucial holiday season. However, the success of these drones is far from given.
Unfortunately, some analysts said that GoPro Karma drone may have wasted its chance to claim a substantial market share.
The recall isn't the only setback that GoPro had to face with the Karma drone.
Nonetheless, investors are relying that GoPro can learn from its mistakes and is potentially on the way to being an impressive long-term stock for investors.