Wearable action camera-maker GoPro (GPRO) reports second-quarter earnings on Tuesday, July 21, after the closing bell. GPRO stock has been on quite the roller coaster in 2015, starting the year off in the mid-$60s only to plunge as low as $37 per share before mounting a months-long rally.
With GPRO earnings on the docket, some investors might be tempted to look backwards rather than forwards — after all, euphoria surrounding GPRO stock hasn’t ended well before.
After the June 2014 GoPro IPO at an offering price of $24 per share, the stock rocketed up to nearly $100 a pop only to plunge back down to earth again. (Notably, the several waves of GoPro’s pullback were driven by factors like its CEO Nick Woodman skirting the lockup period to cash out early and a secondary offering of GPRO stock that all but admitted shares were overvalued.)
With a history like that, GPRO stock has understandably gained a reputation as being somewhat unpredictable. That said, let’s take a look at what the experts predict GPRO earnings will be in the second quarter.
GPRO by the Numbers
Wall Street expects GPRO stock to post earnings of 26 cents per share, a whopping 225% increase from the 8 cents per share it earned in the year-ago quarter. Revenue is also expected to soar, with consensus estimates calling for a 61% jump, from $244 million a year ago to just over $395 million in the June 2015 quarter.
Those are some lofty expectations to be sure, but to the company’s credit, GPRO earnings have yet to disappoint. In each of its first four quarters as a publicly traded company, GoPro stock exceeded bottom-line estimates. (For the record, the “whisper number” for GPRO stock is an EPS of 28 cents, 2 cents per share higher than official estimates.)
Aside from its growing popularity, GoPro’s results should enjoy a natural boost from a new product launch last quarter: The Hero+ LCD camera hit the streets in the U.S. on June 6, setting its sites on a broader market with its lower-priced, entry-level product. With its touch display and video trimming feature, the $299 Hero+ LCD is quite the step up from its cheapest product, the $129 Hero.
As great as that sounds, the GPRO stock will only enjoy the fruits of less than a month’s worth of sales for the Hero+ LCD in the U.S., and investors will have to wait until third quarter results to see how international sales pan out.
Regardless of how GPRO earnings shake out in the second quarter, GoPro’s future looks bright. The ridiculous talk about Apple (AAPL) being a GoPro killer has faded — the next alleged victim is Fitbit (FIT) — and GoPro has already debuted yet another gadget, the tiny HERO4 Session, this month.
With plans to enter the rapidly growing markets of virtual reality and drones, GoPro remains today what it was a year ago: a growth stock with a great story and a huge runway.
As of this writing, John Divine was long shares of AAPL stock and FIT stock. You can follow him on Twitter at @divinebizkid or email him at email@example.com.