JMP Reiterates On GoPro, Selloff 'Overdone'

JMP reiterated its Market Outperform rating on GoPro Inc GPRO Wednesday along with its $105 price target following news that Apple Inc. AAPL patented a competing camera.

Analyst Alex Gauna believed the selloff was “overdone” following the “disclosure of a newly granted Apple patent for a digital camera system with remote control.”

“We have reviewed U.S. Patent 8934045 in its entirety, and reached the conclusion that it represents minimal, if any, change to the GoPro risk profile, as to us it hints more at a smartphone and smartwatch use case, and the mention of waterproofing and mounts are contextual rather than central to the application.”

Gauna did not think that Apple was going to “make a direct foray” into GoPro’s market and noted that at the CES 2015 trade there were “a good number of GoPro imitators but none that were able to match the brand energy, performance, use cases, and/or software and social networking value proposition of the Hero lineup.”

Gauna recommend “investors use the pullback to buy the stock ahead of what we expect to prove a solid upside 4Q14 earnings season report.”

The $105 price target was based on a “7x EV/CY16E sales multiple that represents an approximate 10 percent discount to the mean NTV EV/S metrics recently achieved by premium software, new media, and Internet companies.”

GoPro recently traded at $52.06, up 4.4 percent.