In the images below you will see my analysis on GoPro and why I am bullish on this stock.
The highlights of this analysis are as follows:
- The management has changed the business model of GoPro into a more DTC business.
- GoPro's subscription side of their business had 55% QoQ and 145% YoY growth rates.
- GoPro has plans to increase their gross margins becasue of their DTC model.
- The 3 main industries GoPro Operates within are growing relatively quickly (consumer electronics, photographic equipment, and action camera's)
- GoPro's main competition is DJI, Akaso, and Garmin (especially in the action camera market)
- Buy between $10-14 and hold long-term (until it reaches fair value)
- Sell if the stock falls below $10.49
- Look for re-entry at $8.80-$9.20 (if stock falls below $10.49 and you sell)
Stocks Fair Value:
Using a DCF (as seen in the analysis below), GoPro has an estimated share value of $39.12, this implies a potential upside of 248.35%.
If you follow my advice above there is only a 6.59% downside risk before selling and re-entry, this makes tthe risk-to-reward of my trading strategy very favourable.