GoPro Beat Last Quarter By A 'Crazy Amount,' Will It Repeat In Q2?

After announcing stellar fourth quarter results, GoPro Inc GPRO kicked off the year with another earnings beat. Not all investors were impressed by the results, but many have high hopes for the June quarter. "GoPro is probably gonna smash," Sean Udall, CIO of Quantum Trading Strategies and author of The TechStrat Report, told Benzinga. "GoPro [just had] this unbelievably great quarter and then the stock doesn't react. GoPro beat last quarter by just a crazy amount. They beat by six cents; quarter before beat by almost 30 cents!" Udall said GoPro is in a slower quarter now. Even so, he expects growth to be stronger this time around. "I still wouldn't be surprised if they beat that by three [to] five cents," he added.

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Hardware Reigns Supreme, But…

Former hedge fund manager Cody Willard is a big fan of GoPro's hardware. "I was really impressed with the new GoPro Session camera," Willard, who serves as the chairman of Scutify (a financial social network) and Futr (a futuristic messaging app), told Benzinga. "If GoPro had been focused on convincing investors like me that they were going to roll out the best form factor, wearable HD cameras and stave off the Chinese competition out there, I would have been a lot more interested in the company." Willard was turned off by GoPro's mission to become a media company. "I was actually still impressed with their hardware," said Willard. "I've been confused by GoPro from the beginning and their management doesn't give me any confidence. But boy, that is some neat product they just rolled out with the Session." Willard is referring to GoPro's newest camera.

'A Lot More Bullish'

Udall expects to "get a lot more bullish on GoPro" in 2016. He attributes his long-term view to the company's move into drones. "I do think their drone product is going to be very, very good," said Udall. "I do think it's going to be a very significant revenue-earning stream for them. It might even be a compound revenue stream of sorts because you will have the drone, and the drone will probably have a camera on it. But you'll probably also be able to embed additional GoPro cameras to increase the drone's field of vision, so to speak." Alternatively, Udall said that customers might simply configure their GoPro drone at the point of purchase to decide how many cameras are equipped. "So the drone with four GoPros is the most expensive and highest-margin one [available]," he theorized. "It might have a GoPro in every single direction that the drone points. In other words, you have 360-degree viewing at all times." Little is known about GoPro's drone project, but Udall thinks the company will produce "the best drones on the planet." "They'll probably be the priciest, but they will probably the best, the most durable," Udall concluded. "I think people trust the brand and the product and they'll do pretty well." Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.