GoPro Inc Estimates Raised By Barclays After Q3 Beat

GoPro Inc (NASDAQ:GPRO) shares surged more than 14% in early trading Friday after the company reported solid third-quarter results on Thursday after the bell. GoPro’s non-GAAP earnings came in at 12 cents a share, beating the consensus estimate of 8 cents. Revenue soared 45.7% to $280 million, compared to the Wall Street estimate of $266 million.

GoPro Barclays

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GoPro camera sales jump 32%

Camera sales rose 32% from the previous year. GoPro chief financial officer Jack Lazar said at the earnings call that non-GAAP gross margins of 44.5% was much better than the consensus estimate of 41.5%. The San Mateo-based company had a gross margin of 33.5% in the same quarter last year. The company said it expects fourth-quarter revenue between $550 million and $580 million. That’s much higher than the pre-earnings consensus estimate of $503 million. The company forecasts non-GAAP earnings of $0.65-$0.69 per share.

GoPro Q4

Barclays analyst Joseph Wolf said in a research note that GoPro is executing its new product launches “fairly seamlessly.” The research firm’s checks suggest that the high-end Hero 4 Black is selling very well. After strong results and upbeat guidance from GoPro, Wolf raised his estimates for 2014 as well as 2015. Barclays now expects the company to generate $1.33 billion in full-year revenue, up from the previous estimate of $1.24 billion.

Can GoPro develop a successful media business?

Joseph Wolf also revised non-GAAP net income guidance for FY2014 from $116 million to $144 million. What’s more, he raised full-year EPS estimate from $0.80 to $0.99. For FY2015, Barclays now expects $1.62 billion in revenue, up from the previous estimate of $1.50 billion. Net income for the next year is projected at $179 million, revised upward from $145 million.

However, the research firm maintained its Equal weight rating on the stock with $60 price objective. Barclays said the stock has rallied sharply since going public at $24. Investors probably expect huge upside in the hardware business, or they expect GoPro to develop a successful media strategy. Barclays says it has already included some of those factors in its valuation, but sees limited upside.

GoPro shares jumped 14.55% to $78.18 at 12:28 PM EDT on Friday.