Tomahawk, WI 11/05/2014 (Basicsmedia) – Bulls and bears are entangled in a fierce battle about the future prospects of GoPro Inc. (NASDAQ:GPRO) especially after posting better than expected Q3 earnings. CNBC’s Jim Cramer acknowledges that GoPro is the real deal in the market, but quite expensive for anyone who may want to buy some stakes.
“GoPro Inc. (NASDAQ:GPRO) is an expensive stock; it is trading at 68-times next year earnings estimates which is pretty pricey even when you factor in the company’s magnificent 37% long-term growth rate,” said Mr. Cramer.
The bulls believe that GoPro Inc. (NASDAQ:GPRO) has evolved from being just a maker of cool cameras and accessories that lets people capture all kinds of footage. They maintain the company is turning out to be a key player in the social media ecosystem as it allows people to generate free content with the wide line of cameras on offer.
GoPro Inc. (NASDAQ:GPRO)’s content published on YouTube in the last quarter grew by 92% with views increasing by 130%, clearly highlighting its credential in the social ecosystem. Bears, on the other hand, believe that the company’s strategy for the social media might be a bit high on the fact that there is no clear strategy on the monetization of the social media content
The biggest question according to Cramer is whether the company would maintain its impressive run or will fade along the way. Having debuted in the market at $24 in June GoPro Inc. (NASDAQ:GPRO) was trading at a high of $91 in early October, sunk to lows of $68 and is back again to highs of $84.
The impressive run according to Cramer is down to the fact that the company has been successful in maintaining a consistent revenue growth.
“The consensus at Wall Street was for GoPro Inc. (NASDAQ:GPRO)’s revenue to rise 38% for the quarter. There was a whisper, the number the bullish hedge funds quietly told each other they were talking about? Was in the low 40% range. So what happens? GoPro delivers 46% revenue growth for the quarter,” said Mr. Cramer
GoPro Inc. (NASDAQ:GPRO) has already announced that it expects its revenue top grow by 56% in the fourth quarter, margins that may allow the stock to surge even further heading into 2015. Gross margin of 44% has clearly highlighted that GoPro Inc. (NASDAQ:GPRO)’s high-end cameras that go for as much as $499 are selling like hot cake.
The hero4 camera is reportedly the best product that the company has ever launched that should accelerate sales heading into the holiday season.