It has been about a month since the last earnings report for GoPro (GPRO). Shares have added about 7.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is GoPro due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
GoPro Swings to Loss in Q1, Revenues Decline Y/Y
GoPro, Inc reported first-quarter 2023 non-GAAP loss of 18 cents per share, wider than the Zacks Consensus Estimate of a loss of 15 cents. The company had reported earnings of 9 cents in the year-ago quarter.
GoPro generated revenues of $174.7 million, down 19% from the year-ago quarter’s levels. However, the top line beat the consensus mark by 5.6%. GPRO’s pricing actions impacted performance of the top and bottom lines in the reported quarter.
Quarter in details
GoPro shipped 462 million camera units during the reported quarter, down 11.7% year over year.
GPRO recorded 2.36 million subscribers, marking 36% year-over-year growth at the end of the reported quarter. Quik subscribers soared 12% to 289,000 from the prior-year quarter.
Region-wise, revenues from the Americas totaled $89.5 million (51.3% of total revenues), down 13% from the year-ago quarter’s levels. Revenues from Europe, the Middle East and Africa were $46 million (26.3%), down 25% year over year. The Asia Pacific generated revenues of $39.2 million (22.4%), down 25%.
Based on channels, revenues from GoPro.com were $94.9 million (54.3% of total revenues), up 7% year over year. In the GoPro.com channel, hardware revenues totaled $71.7 million compared with $70 million in the prior-year quarter. Subscription revenues amounted to $23.2 million, up 24.7% year over year.
Retail channel generated revenues of $79.8 million (45.7%), down 37.7% from the year-ago quarter’s levels.
The company had $154.8 million in inventory compared with $119.4 million in the year-ago quarter.
Gross profit was $52.5 million, down 42% year over year. Total operating expenses were $92.3 million, up 12.2% year over year. Operating loss totaled $39.8 million against the operating income of $8.2 million in the prior-year quarter.
Non-GAAP gross margin was 30.3% compared with 42% in the year-ago quarter. Adjusted EBITDA loss was $27.5 million against the adjusted EBITDA income of $20.7 million in the year-ago quarter mainly due to the company’s new product pricing strategy that resulted in $24 million in price protection charges.
Cameras with suggested retail prices at or above $400 contributed 87% to revenues in the reported quarter compared with 92% in the prior-year quarter.
Cash Flow & Liquidity
In the quarter under review, GoPro used $67.1 million of net cash from operating activities compared with $73.4 million in the year-ago period.
As of Mar 31, the company had $157.8 million of cash and cash equivalents with $141.3 million of long-term debt.
GPRO repurchased $5 million worth of shares.
For the second quarter of 2023, revenues are estimated to be $220 million (+/- $5 million). Non-GAAP adjusted loss is expected to be 7 cents per share (+/- 2 cents).
Gross margins are anticipated to be 33.5% (+/- 50 basis points). Street ASP is projected to be nearly $360.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month.
The consensus estimate has shifted -50% due to these changes.
At this time, GoPro has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
GoPro has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
GoPro belongs to the Zacks Audio Video Production industry. Another stock from the same industry, Sony (SONY), has gained 4.6% over the past month. More than a month has passed since the company reported results for the quarter ended March 2023.
Sony reported revenues of $23.17 billion in the last reported quarter, representing a year-over-year change of +18.9%. EPS of $0.78 for the same period compares with $0.77 a year ago.
For the current quarter, Sony is expected to post earnings of $0.99 per share, indicating a change of -26.7% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.5% over the last 30 days.
Sony has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report