Goldman Sachs Upgrades GoPro, Shares Increase in Premarket Trade

GoPro Shares Increase

On Tuesday, in pre-market trade, GoPro, Inc. (NASDAQ:$GPRO) shares surged. Why? It all started after Goldman Sachs upgraded the stock from ‘sell’ to ‘neutral’ as the analysts believe GoPro’s upcoming launch of a new Hero camera is a catalyst.

As of right now, the San Mateo, California-based company is on track to launch an HERO6 camera in the second half of 2017. Generally speaking, product launches tend to lead to an outperformance of the stock, the analysts said.

In addition, GoPro is scheduled to launch a 360-degree Fusion camera next year, which will lead to even more upside. That said, the company still has a few headwinds, as camera sell-through was down 9% year-over-year in the previous quarter. In fact, sell through has dropped in the past five of six quarters on a year-over-year basis.

However, analysts still forecast that GoPro will return to cash generation in the second half of the year. According to the analysts, GoPro will be helped by the following: restructuring its costs, reducing inventory, and raising convertible debt.

Further, Goldman Sachs increased their price target from $6.75 to $10.

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About the author: Caroline Harris is a third-year student at Capilano University in North Vancouver, Canada. Having already completed an Associates Degree in Psychology, Caroline is now finishing her Bachelor's degree in Communications. In preparation for working in the advertisement sector, Caroline is writing financial content and analysis. On a daily basis, Caroline works on articles regarding the following topics: finance, cryptocurrency, technology, and politics.