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GoPro, Inc. (NASDAQ:GPRO), is not the largest company out there, but it received a lot of attention from a substantial price increase on the NASDAQGS over the last few months. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Today I will analyse the most recent data on GoPro’s outlook and valuation to see if the opportunity still exists.
Check out our latest analysis for GoPro
What’s The Opportunity In GoPro?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 15% below my intrinsic value, which means if you buy GoPro today, you’d be paying a fair price for it. And if you believe that the stock is really worth $6.90, then there’s not much of an upside to gain from mispricing. Is there another opportunity to buy low in the future? Since GoPro’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
What kind of growth will GoPro generate?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. However, with a negative profit growth of -18% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for GoPro. This certainty tips the risk-return scale towards higher risk.
What This Means For You
Are you a shareholder? Currently, GPRO appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock optimal for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on GPRO for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The stock appears to be trading at fair value, which means there’s less benefit from mispricing. Furthermore, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help gel your views on GPRO should the price fluctuate below its true value.
In light of this, if you’d like to do more analysis on the company, it’s vital to be informed of the risks involved. You’d be interested to know, that we found 1 warning sign for GoPro and you’ll want to know about it.
If you are no longer interested in GoPro, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
What are the risks and opportunities for GoPro?
GoPro, Inc. develops and sells cameras, mountable and wearable accessories, and subscription services and software in the United States and internationally.
View Full Analysis
Rewards
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Trading at 15.4% below our estimate of its fair value
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Earnings are forecast to grow 20.54% per year
Risks
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Profit margins (6.7%) are lower than last year (32.2%)
View all Risks and Rewards
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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