Has the short-term bounce seen in shares of GoPro, Inc. (NASDAQ:GPRO) come to end? That’s the question investors are asking Thursday as GoPro stock is now under heavy selling pressure, falling as much as 3%.
The reason for Thursday’s decline? The action-camera maker has reportedly stopped selling its products to Amazon.com, Inc. (NASDAQ:AMZN).
According the company, the halt to Amazon shipments is temporary, and GPRO says that sales to Amazon should resume by the end of October. But “should” and “will” are two separate statements. Investors are looking for better assurances before buying GoPro stock.
According to analysts at Piper Jaffray, the disruption with Amazon could impact GoPro’s third-quarter results, and possibly its fourth quarter, too. The analyst noted that GPRO’s second-half outlook didn’t account for the disruption to Amazon sales and is “incrementally concerned” about GoPro’s ability to reach its guidance. Piper Jaffray on Thursday reiterated an “underweight” rating and $9 price target on GoPro stock.
As it stands, GPRO stock has now lost 17% of its value just in the past five days, wiping out its entire year-to-date gains and then some. The company’s decline has surprised investors — many of whom were betting on GoPro to turn things around heading into the all-important holiday quarter. Nick Woodman, the company’s CEO, has boasted about the GoPro’s upcoming product launches, particularly its new drone, Karma, and its Hero 5 Black and Hero 5 Session cameras.
The long-awaited Karma Drone, which will sell for $799 without a GoPro camera, was expected to be the holiday’s biggest seller. The Karma, despite the hefty price tag, is touted as a solid offering that should gain traction with consumers.
GoPro and GPRO stock sold off last year because the company didn’t have enough new products to excite consumer and investors. That’s not the case this year. But GoPro needs better execution to get those products in the hands of consumers. And now GoPro’s sales are going to be harder to come by without Amazon and Amazon’s Prime customers — many of whom would be ideal candidates for its high-end cameras and drone.
In the most recent quarter, reported in July, GoPro logged its third consecutive quarterly loss. The stock has risen since then in anticipation of higher sales. For the just-ended quarter, Wall Street expects sales to rise over 50% year over year to $677.2 million.
To revive GoPro stock, the company must not only beat that sales number, it must also guide with confidence for the fourth quarter. And that’s now a taller order without the help of Amazon.
As of this writing, Richard Saintvilus did not hold a position in any of the aforementioned securities.