GoPro Inc. share price down, posts decreasing profit in first report after its hot IPO

GoPro Inc., in its first earnings report after going public in June, reported a larger than expected quarterly loss, that sent the shares as much as 13% down in after-hours trading on Thursday.

The US company, which produces wearable high-definition cameras used primarily by extreme sports enthusiasts, reported a second quarter net loss of 19.8 million dollars, almost four times larger than the 5.1 million dollars net loss, reported a year ago. However, excluding some items, GoPro posted a profit of 8 cents apiece, beating the 7 cents median analysts estimate.

GoPros sales jumped 38% to 244.6 million dollars in the second fiscal quarter, outstripping the average analysts’ estimate of 238.1 million dollars.

Nicholas Woodman, Chief Executive Officer of the company, defined the reported period as a “strong quarter”, buoyed by increased demand for the Hero 3+ Black edition of the camcorder and demand for accessory products.

At the end of June, GoPros IPO priced at 24 dollars apiece – the high end of marketed range of 21 to 24 dollars. The shares gained 31% in New York on their first trading day and have since doubled.

The IPO gave the company, which has a decade-long history, a market value of about 3.9 billion dollars. The result made the companys IPO the largest one carried out by a consumer electronics company in about twenty years. The promising start highlighted the fact that technology growth stories are still attractive to investors.

However, according to Alex Gauna, an analyst at JMP Securities, even as consumers keep purchasing tiny video cameras that extreme sports enthusiasts strap onto their bodies to record their exploits, investors are locking in their profits after the company made an impressive stock-market début.

“It looks clean to me,” said Gauna, cited by Bloomberg. The analyst, who rates the stock the equivalent of a buy also added: “Maybe there’s some profit-taking from people who thought they’d get even more. Plus, there was a huge move ahead of this announcement.”

GoPro Inc.s shares slumped as low as $41.70 in after-hours trading, after previously jumping 3.57% to close at $47.97 a share yesterday in New York, giving the company a market valuation of $5.91 billion. According to Financial Times, the 3 analysts offering 12 month price targets for GoPro Inc. have a median target of $48.00, with a high estimate of $60.00 and a low estimate of $45.00. The median estimate represents a 0.06% increase from the last price of $47.97