What: Shares of action-camera maker GoPro (NASDAQ:GPRO) jumped on Monday on no apparent news. The stock was up about 9.5% at 3:45 p.m. ET after being up as much as 13.5% earlier in the day.
So what: GoPro's stock has been hit hard over the past year, down about 73% even after Monday's gain. Revenue growth has not just ground to a halt but reversed, with the company posting steep sales declines in recent quarters.
GoPro last reported earnings at the end July, and while revenue plunged, the company promised a return to profitability during the fourth quarter. New products -- namely, the Hero5 and Karma drone -- will need to be major hits during the holiday season for the company to fulfill that promise. Monday's stock-price jump may simply be the result of growing optimism among investors that a turnaround is in the cards.
Now what: While progress in reducing channel inventories was made during GoPro's latest quarter, giving investors hope that the company's sales declines would soon end, the growth story remains shrouded in uncertainty. GoPro will need to hit it out of the park this holiday season with new products. Otherwise, recent gains may end up being given right back.