Wedbush Analyst: No Turbulence For GoPro In Wake Of Snap Drone Hype

Snap Inc SNAP rocked the camera space this week on news of its quiet acquisition of drone company Ctrl Me Robotics. But the 2016 purchase and implicit shift in focus don’t necessarily warrant concern for GoPro Inc GPRO and other competitive camera firms.

Wedbush Analyst's Exclusive Take

“Personally, I don’t see Snap buying a drone manufacturer for under $1 million as any kind of threat to GoPro in the near term,” Wedbush Securities analyst Nick McKay, who covers GoPro, told Benzinga. “GoPro has talked about in the past how the buyer of a GoPro product wants a different experience than somebody that goes on social media to capture and display content. I think they’re right.”

McKay does not cover Snap but believes the company “has other things they need to focus on” for the time being than pushing into the drone space.

Meanwhile, the product line is integral to GoPro’s growth strategy. The company relaunched its redesigned Karma in February following a battery-related recall, and despite the crash-inducing fluke, the product initially garnered positive reviews. Wedbush now considers the Karma drone as more palatable to the casual consumer than competitor DJI’s Mavic.

“I think [GoPro] has much better branding than any of the other drone manufacturers, at least domestically,” McKay said. “I think GoPro is a household name. I don’t think the same thing about any other drone manufacturer, and that’s a big advantage for them, especially among buyers who aren’t concerned with having the latest and greatest technology.”

The analyst currently has a Hold rating on GoPro with a $9 price target. At the time of publication, GoPro was trading at $8.10, down 2.4 percent on the day.

Taylor Cox contributed reporting.

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