Morgan Stanley says the channel sold through more than 500,000 units in January alone

GoPro action cameras were flying off the shelves in the crucial holiday quarter. The San Mateo-based company is scheduled to release its fiscal Q4, 2014 results on February 5 after the market close. But many fear that first-quarter sales could decline dramatically after the stellar performance in December quarter. That may not be the case as one research firm says that they saw solid sell-through rates in January.

GoPro

MS expects GoPro to ship 1.1 million units in the first-quarter

Morgan Stanley analyst James Faucette said in a research note Thursday that his checks reflected the expected drop in GoPro’s post-holiday sales. But sell-through rates remained strong in January. It puts the company on track to meet or exceed Morgan Stanley’s January-March quarter estimate. The research firm expects GoPro to ship 1.1 million units in the first quarter.

Data collected by Faucette showed that the channel sold through more than 500,000 units in January alone. There were fewer instances of GoPro cameras running out of stock. But a large number of retailers Morgan Stanley spoke to needed weekly shipments to fulfill consumer demand. Faucette estimates that the average weeks inventory rose only slightly to a little over two weeks.

GoPro to benefit from channel fill opportunities

Morgan Stanley said the company would “benefit from the channel fill opportunities,” which strengthens the case for an upside to the current Q1 expectations. Morgan Stanley reiterated its Equal-weight rating on the stock with $57 price objective. The price target reflects about 14% upside from the current levels.

Anyway, investors and analysts are looking forward to the company’s Q4, 2014 results next week. Analysts expect GoPro to report 70 cents in earnings with $580.33 million in revenues. Oppenheimer says there is a high probability that GoPro would edge past the revenues, EPS and margin estimates. GoPro’s own guidance calls for revenue between $550 million and $580 million with 65 to 69 cents in EPS.

GoPro shares fell 2.30% to $49.67 at 11:12 AM EST on Friday. The stock has declined more than 24% in the past 30 days