Dougherty & Co Downgrades GoPro (GPRO) to Neutral

Dougherty & Co downgraded GoPro (NASDAQ: GPRO) from Buy to Neutral.

Analyst Charles Anderson commented, "We expected bad GoPro forecasts, but what we got was worse than feared. Our estimates are coming down considerably. The level of spending is frankly staggering -- we now estimate GoPro will spend over half of its revenue (we are at the low-end of guidance) in 2016 on operating expenses. Management believes they can spend their way out of this and resuscitate the brand and the products. Our concern is: 1) we've never seen this strategy from GoPro in its history 2) we cannot find another example of a consumer electronics company of this size that successfully deployed this strategy. For this reason, we are stepping to the sidelines. If the stock trades at $9.75 (implied by AH trading), it will be roughly 0.65 EV/S on our new FY17 revenue estimate. We acknowledge this is effectively a floor valuation for historical peers. But our concern is the that the incremental shareholder will be skeptical of estimates given recent swings."

For an analyst ratings summary and ratings history on GoPro click here. For more ratings news on GoPro click here.

Shares of GoPro closed at $10.71 yesterday.

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