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Why GoPro Stock Sank 13.2% in August

By Keith Noonan – Updated Sep 7, 2020 at 10:03AM

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The action-camera company's share price is now roughly flat over the last year.

What happened

Shares of GoPro (GPRO -4.51%) fell 13.2% in August, according to data from S&P Global Market Intelligence. The stock slumped following the publication of the company's second-quarter results.

^SPX Chart

^SPX data by YCharts.

GoPro published Q2 results on Aug. 6, delivering sales for the period that came in ahead of the market's targets. But the company's loss for the period also came in larger than anticipated, and the significant top-line beat wasn't enough to keep the stock from falling.

The GoPro Max camera.

The GoPro Max camera. Image source: GoPro.

So what

The company posted a loss of $0.20 per share on revenue of $134.25 million, while the average analyst estimate had called for a per-share loss of $0.16 on revenue of $109.03 million. Sales were down roughly 54% year over year in the quarter, but there were some bright spots.

Camera sell-through hit nearly 750,000 in the quarter, significantly ahead of the target for sell-through between 600,000 and 650,000 units that the company laid out in May. The paid subscriber count for GoPro Plus also reached 372,000, up 5% sequentially and 57% year over year.

Now what

The stock has continued to lose ground in September, sliding roughly 10% in the month so far. 

^SPX Chart

^SPX data by YCharts.

GoPro expects sell-through of 900,000 units in Q3, representing growth of 5% year over year. The company anticipates that between 36% and 40% of its sales will come from its website in the current period, and that it will post sales between $220 million and $250 million in the quarter, representing about 40% growth sequentially at the midpoint of the target and 79% year over year.

The company has a market capitalization of roughly $650 million and is valued at about 0.75 times this year's expected sales. 

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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