Shares of GoPro Inc (NASDAQ:GPRO) posted remarkable gains on massive volume in last one week. This splurge of gains can be attributed to strong financial performance in 2Q2016. While it is quite early to say, it appears as if things are gradually turning around for the stressed camera-maker and it can post a strong 2H2016. In the coming two quarters, the firm is all set to gain from higher ASPs, highly projected product launches, and an increasing software presence.
The future plans
GoPro is set to introduce its first drone, the Karma, and its latest camera, the HERO5, in the coming quarters of this year. The management projects the new camera to be the most successful camera launch in company’s history. It would be remarkable, considering the previous version ‘HERO4’ shipment figure was 2.4 million units in the FY2014 holiday-season quarter. As per the market experts, the shipment of first drone can be around 50,000 in the Holiday quarter. The sales of both products combined together can lead in considerable revenue tailwinds.
Better ASPs
The analysts believe that increased unit shipments of GoPro products will come along with higher ASPs. A couple of months ago, the camera maker stopped making of its low-end MSRP cameras, which resulted in 14% YoY ASP increase in reported quarter. This increase in ASPs will continue in the coming two quarters of 2016. Additionally, the latest camera model can post the best ASP in the company’s entire product line.
Next factor that can boost GoPro growth is early advancement of company’s software and media slide. Some time ago it appeared like company was turning into a media firm. However, that hype failed and from thereon it has never really thought about re-entering into the investment thesis. The latest report indicates that numerous tailwinds are converging for the company, which eventually may help GoPro to post a strong performance in 2H2016.
