GoPro shares have fallen 54% year-to-date. Earlier this month, Barron’s issued a damning report, claiming that GoPro was a one-trick pony like BlackBerry, Flip, and Palm. But Stern Agee CRT analyst Rob Cihra believes that the stock will recover in 2016. Cihra has initiated coverage of GoPro with a Buy rating and $45 price objective, which reflects a 50% upside from current levels.

GoPro

Can smartphones replace GoPro cameras?

Cihra rubbished the reports that smartphones and low-cost rivals will eventually eat into GoPro’s market and brand. The newest phones from Apple and Samsung have 4K video capabilities. Cihra said GoPro has become “synonymous” with the action camera market. People don’t just want an action camera, they want a GoPro.

Though smartphones have rendered several one-feature products like mp3 players, Flip and Palm obsolete, they are unlikely to make a dent into the Nick Woodman-led company’s sales. That’s because the San Mateo-based company’s cameras are designed for environments and situations where people simply wouldn’t want to risk their smartphones. Would you risk dropping your iPhone?

GoPro’s growth to pause in 2H 2015

Cihra added that the company is rapidly expanding its business into other segments such as consumer drones and virtual reality. The analyst believes GoPro’s user-generated content will be its biggest growth driver as the company is transforming itself into a media firm. Sterne Agee CRT expects the company’s growth to “pause” in the second half of 2015 due to slow sales of its tiny Hero4 Session camera.

Rob Cihra expects the company’s revenue to rise 24% YoY to $2.3 billion in FY2016, while camera sales are expected to jump 18% to 8.7 million units. Separately, Pacific Crest analyst Brad Erickson assigned Sector weight rating to GoPro. Erickson said his checks suggest a decline in the sales of GoPro cameras. Pacific Crest has lowered its Q4 estimates for GoPro to $674.3 million in sales and 89 cents in EPS from the previous guidance of $729 million and 96 cents.