Some analysts have questioned the mass-market appeal of rough and tumble, go-anywhere GoPro Inc cameras on the basis of the limited utility of the device to the average armchair athlete or amateur photographer. Morgan Stanley analysts James Faucette, Yuuji Anderson and Meta Marshall decided to document their research on GoPro by spending some time using a GoPro camera.
However, after the three men spent eight hours producing a two-minute video of their personal GoPro exploits (not available for viewing), they now have some reservations about the stock, at least for the immediate future.
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The MS analysts note the continued development of video editing technology is critical for GoPro’s future success. They say: “Key for GoPro will be that it lead in video editing automation.”
General perspective on GoPro
The video production process is currently “too tedious for persistent and mass market use,” the analysts said. The team therefore initiated coverage of the stock with an equal-weight (neutral) rating. They assigned a price target of $57 a share to the firm.
At noon today, GoPro shares were down 2.6% at $57.83
Three conclusions from MS analysts
Faucette and colleagues wrote a slightly tongue in cheek assessment of their experiences with the GoPro camera.
” 1) Our feats as equity research analysts provoke way fewer jaw-dropping oohs and ahhs than the world’s top motorcycle freestylers
2) it is way easier to shoot hours of raw video content (the hardware capabilities are great) than it is to create anything that is even remotely digestible
3) the video editing and creation process is incredibly laborious—it took nearly 8 hours of work to create a sub-2 minute video—even as GoPro’s Studio helped ease the process (we didn’t have to match soundtrack to video, Studio’s [software provided] templated clip lengths and transitions, while providing a general storyboard outline).
And while we are quite proud of our end result, we admit (ruefully) that most would find the end result largely unwatchable (or at the very least almost completely uninteresting). The other obstacle we found in editing our video is that PC demands are still quite high…”