Is GoPro (GPRO) a Good Long-Term Investment?
Yesterday we saw the American Dream unfold before our very eyes. Surfer dude inventor Nicholas Woodman became a billionaire when his company GoPro had its IPO. The company is known for its portable and durable camera used by sports enthusiasts to bring the world first-person point of view action like we’ve never seen before. Like the skydive from space Felix Baumgartner took in 2012.
GoPro’s IPO raised $ 427 million after offering 17.8 million class A shares priced at $ 24. Today, GoPro traded as high as $ 40.
The company sells just one camera design that retails between $ 200 and $ 400. It’s the first consumer-electronics company to go public since the 2011 debut of headphone maker Skullcandy. Revenues for the three months ended March 31 came in at $ 235 million while net income was $ 11 million.
GoPro is planning on being more than just a hardware maker. They are planning to partner up with Microsoft, Google, and Virgin America to monetize the videos that camera owners have up to now been posting for free. They claim to have the top-ranked brand channel on YouTube, Facebook and Instagram. Already nearly 6,000 GoPro videos are uploaded to YouTube each day.
This strategy makes a lot of sense to me. In the highly competitive arena of consumer electronics a giant like Apple or Samsung could easily enter the market with a GoPro-like product of its own. GoPro needs to do something to differentiate its brand and create a new income stream.
My question is, do you think GoPro is a good long-term investment?
I think that they will find a way to transform into more than just a consumer-electronics company and the long-term prospects for the company are very good. New products and innovation will only help their brand in the future. Basically, I’m a buyer here.
Let me know what you think about GoPro’s chances of long-term success.