Please ensure Javascript is enabled for purposes of website accessibility

Why GoPro Inc's Shares Jumped 23% in January

By Travis Hoium – Feb 1, 2017 at 10:20PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Investors are getting more bullish on GoPro's stock, but there could be rough waters ahead.

GoPro's Hero 5 lineup of products.

GoPro's Hero 5 lineup of products. Image source: GoPro.

What happened 

Shares of action-camera maker GoPro Inc (GPRO -0.19%) jumped 23.4% in January according to data provided by S&P Global Market Intelligence, as investors got a little more bullish on the company's prospects. 

So what 

There have been a number of daily factors driving GoPro's stock higher, like a positive analyst note and BlackRock increasing its stake in the company. The broader story here is that investors are becoming more bullish on the company's upcoming fourth-quarter report, as well as its future sales of action cameras and drones. In fact, the Karma drone returned to the market on Wednesday, February 1 after a recall that threw investors for a loop. 

What should be noted is this move is purely speculative and could be unraveled after earnings are released. So investors should keep an eye on important metrics like revenue, inventory, and gross margins because if those are improving, GoPro's stock could have more room to run. 

Now what 

Given the volatility of GoPro's shares in the past year, I don't think the move in the past month should be a sign that the worst is over. If fourth-quarter results fall short of expectations, or if Karma crashes again for some reason, the stock could fall rapidly, once again. But investors may be seeing some sort of light at the end of the tunnel here, and if GoPro can learn from past mistakes, it could be on its way to being a great long-term stock for investors. 

Travis Hoium owns shares of GoPro. The Motley Fool owns shares of and recommends GoPro. The Motley Fool has the following options: short January 2019 $12 calls on GoPro and long January 2019 $12 puts on GoPro. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

GoPro Stock Quote
GoPro
GPRO
$5.15 (-0.19%) $0.01

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
339%
 
S&P 500 Returns
109%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/06/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.