According to S&P Capital IQ data,shares of action camcorder maker GoPro Inc (NASDAQ:GPRO) fell 19.5% in February, as Mr. Market ignored a positive Q and disappointing Q1 guidance (a surprise C-level executive departure).
After running up as much as 15% while reporting its 4Q earnings of US$ 0.99/share, up from US$0.33 the year prior and above the consensus estimate of US $0.70, the stock quickly reversed after estimating 1Q earnings of US$0.15/share to US$ 0.17/share, lower than the consensus estimate of US$0.17.
By the first downturn, GoPro’s story can be best summarized. After playing up its social-media ambitions, without a well-formed plan to monetize content, the stock was bid up to atmospheric valuations that any consumer electronics company would have problems maintaining. As so much growth was baked into its valuations, that’s why GoPro fell 12% after blowing past analyst expectations.
GoPro will fall in stock price in March — and incessant bullishness has worn off and the company continues to operate well fundamentally. GoPro will continue to be a volatile stock, but I feel its brand cachet and unique value proposition will enrich patient, long-term investors.
