GPRO Stock Plummets 12% on Big Earnings Miss

GPRO stock

GPRO stock is trading sharply lower after GoPro Inc (NASDAQ:GPRO) reported its fourth-quarter profit, missing even the lowest estimate turned in by analysts.

There was a time when action camera maker GoPro was regarded as a highly innovative company, but those days are over, and over the past few years, the company’s stock has struggled. However, the company’s performance in the latest reported quarter proved to be a pleasant surprise for investors. It declared its Q4 2019 results and GoPro managed to deliver the most profitable quarter in its history, despite still missing estimates.

Hero 8 Series Supports Revenue

The performance was primarily driven by the GoPro Hero 8 Series sales in the period. In terms of revenue, it was the third-best performance from the company since becoming public in 2014.

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In the fourth quarter, GoPro generated revenue of $528 million; however, this fell short of analysts’ estimates of $566 million. The net income for the quarter stood at $96 million, which worked out to 65 cents a share. That did not meet analysts’ expectations of 70 cents a share, either.

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Ultimately, the performance did not meet Wall Street expectations, and GPRO stock experienced an aggressive selloff by 12% in the morning session.

Despite the selloff in the stock, it should be noted that GoPro has managed to make a turnaround from its performances in recent years. In 2018’s fourth quarter, the company only generated $32 million in net income, and the earnings per share were 22 cents. Revenue in the year-ago quarter was $377 million.

The performance in Q4 2019 could well prove to be a turning point for the company going forward. The company’s Chief Executive Officer, Nick Woodman, said as much. He stated that GoPro is now in a good position to further boost its revenue and earnings per share going forward.

GPRO stock is down 20% over the past year.

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Featured image: DepositPhotos © ymgerman

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