Did Citi Just Call A Bottom In GoPro?

• Shares of GoPro, Inc. GPRO have decline 45.37 percent, year to date.
• Citi’s Jeremy David has reiterated a Buy rating and price target of $90 on the company.
• David believes that concerns regarding the slow start to HERO4 Session have created an attractive entry point into the stock.

The company’s CFO has confirmed at Citi’s Global Tech Conference that the HERO4 Session, launched on July 12, has been witnessing a slow start. Investor concerns regarding this slow start have led to a significant decline in the share price.

Although revenue growth is expected to be slow in the near term, David believes that this is not indicative of any long term issues at GoPro. “The bear case of ASP, GM declines appears unlikely with competitors fading away,” David stated, while mentioning that the company was expected to benefit from flying cams and the modest growth in action cams.

In addition, the Q3 miss and the downward revision in the Q4 guidance appear to be largely priced into the stock. David expects upside to be driven by product launches slated for 2016, such as the flying cam in 1H16 and the HERO5 in spring or early summer of 2016.

The 2H15 and 1Q16 estimates have been lowered to reflect the downside due to the HERO4 Session.