GoPro Inc (NASDAQ:GPRO) stock rallied 3.63% on Thursday to close at $81.31, an all-time high. The stock has more than tripled since going public at $24 in late June. Barring a couple of brief declines, the stock has consistently soared from to reach a record high. The stock had fallen 13% when GoPro reported its second-quarter results on July 31.
GoPro’s next camera will be a ‘big one’
The stock has skyrocketed in recent weeks amid rumors that GoPro will launch a new action camera next month. GoPro CEO Nick Woodman said at a conference last month that the company’s next camera, rumored to be called Hero 4, will be a “big one.” Its new action camera is expected to pack powerful specs such as 4K video recording, electronic image stabilization, and an improved WTR Tone-mapping. Stifel analyst Jim Duffy said in a research note that it would cost $499 compared to $399 for Hero 3+ Black Edition.
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Though the company went public only a few months ago, it has emerged as the best performing IPO of this year. However, its explosive growth has attracted its share of skeptics. According to FactSet, seven out of 10 analysts covering GoPro have a Hold rating on the stock. The other three who maintain a Buy rating have their price targets below its current share price.
GoPro likely to face tough competition
Brian Nichols of The Motley Fool says that investors are better off “sitting this one out” for now rather than jumping in at this point. GoPro cameras have become a social movement, with YouTube videos shared by GoPro users garnering millions of views. But its market value has reached almost ten times its annual revenue. The San Mateo-based company faces the risk of increased competition.
HTC is expected to launch a waterproof action camcorder next month to challenge GoPro. Sony and Garmin have also entered the space. Rising competition would put pricing pressure on GoPro, which may affect its gross margins and market share.
GoPro shares gained 0.52% to $81.73 in pre-market trading Friday.