For those interested in computer hardware stocks, take note of the following: After the market closes Thursday, GoPro Inc. (NASDAQ:$GPRO) is scheduled to post second-quarter earnings. However, there are a few analysts out there who remain skeptical as to whether the company’s line of products will deliver growth.
Why? The San Mateo, California-based company has experienced numerous setbacks as of late, which includes shutting down its entertainment division, enduring two botched product launches, and layoffs intended to reduce costs.
Aside from the two failed product launches, the remaining measures were meant to mark a turnaround for the company and a brand new streamlined operation. However, analysts aren’t buying it.
“We remain unconvinced of the company’s ability to return to sustainable and profitable growth through its current product lineup,” said Raymond James analyst Tavis McCourt.
While the Karma drone did return to the GoPro lineup, McCourt believes the number and quality of reviews connected to the drone suggest it has not been popular amongst consumers. Additionally, GoPro has three Hero4 cameras, and while those seem to be dominating the category, the overall category is falling, McCourt wrote.
It’s worth mentioning that, even in the last quarter, when GoPro surpassed earnings and sales expectations, shares still fell the next day, as analysts were concerned over the company’s fundamentals.
After the closing bell, here’s what investors should look for:
- Earnings: According to analysts polled by FactSet, GoPro is forecast to report a loss per share of 25 cents, compared to a loss per share of 52 cents in the 2016 period. In five out of the past eight quarters, the company has surpassed earnings expectations.
- Revenue: Analysts polled by FactSet expect GoPro to generate revenue of $269 million, which is above the $220.8 million reported in the 2016 period. In four of the past eight quarters, the company beat sales expectations.
- Stock Reaction: Over the course of the past three months, GoPro shares have lost 0.6%.
To end, it’s important to clarify that analysts do not expect the company to change its 2017 guidance. They still expect GoPro to post year-over-year growth in revenues. Additionally, analysts at J.P. Morgan expect “solid” results for the company. That said, the same analysts are convinced that GoPro won’t see an increase in its business unless it is able to successfully launch new products.
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