GoPro [NASDAQ: GPRO] continues to beat analyst expectations, with each subsequent quarter. Last quarter, analysts expected the company to make a quarterly loss of $0.09 per share, but the loss stood at $0.07 per share. On top of that, the company had revenues of $242.71 million in the last quarter, much higher when compared to the same quarter last year when revenues stood at $202.35 million. This sustained revenue growth is due to a strong market showing of GoPro’s HERO7 Black Camera.
While the company has faced numerous challenges, especially due to competition from smartphones, its HERO7 black camera continues to record strong growth. The demand is so high that the company has raised the average cost of this camera by 8%, and sales continues to grow. Demand for this camera is driven by its industry-topping Hypersmooth video stabilization technology. This technology allows for better video quality than any other technology, and the market is receptive. The positive impact of this technology is not only visible in the overall sales of the HERO7, but also in the increased organic viewership of GoPro content. In the last quarter, organic viewership rose to 173 million, while social media views rose to 40 million. In fact, the company was recognized and awarded for social media performance. It’s a positive indicator of the growing brand strength of GoPro in generating unique content.
GoPro has also taken cost-related measures to improve margins on the HERO7. One of them is the move to shift production to Mexico. Starting in the 2nd half of the year, GoPro will do most of its production in Mexico. The idea behind this is to cut on production costs, and protect the company from possible tariffs.
It is noteworthy that the company’s growth in global markets is growing. In announcing its Q1 results, the company has stated that retail sales grew by 11% in Asian countries like Japan and China. The company also has a dominant position in the U.S action camera market. The company’s share of the U.S market stands at 89%. With the highly popular HERO7 Camera, it is likely to maintain this market share going forward. In fact, in Q1 of 2019, HERO7 was the top selling camera in the digital imaging space. It’s a good signal for its growth going into coming quarters.
Looking at the company’s charts, the company continues to outperform the market. In the last 52-weeks, it has returned 10.45%, while the S&P 500 returned 5.56%. From a look at the charts, the company is on a rebound, after a dip to $5.86, and seems to be trading at a key resistance level at $6.71, but momentum is growing. It has already pushed above key resistance on the 3-month 50-day moving average at 6.42. Its positive momentum is backed by the growing dominance of the HERO7, and it doesn’t seem to be slowing down. The company also has a relatively low beta of 0.65. This means that even if the market corrects due to the on-going trade war, GPRO may not drop significantly.