GoPro, Inc. (NASDAQ:GPRO) Just Reported Earnings, And Analysts Cut Their Target Price

It's been a pretty great week for GoPro, Inc. (NASDAQ:GPRO) shareholders, with its shares surging 15% to US$1.57 in the week since its latest quarterly results. Revenues of US$259m arrived in line with expectations, although statutory losses per share were US$0.05, an impressive 38% smaller than what broker models predicted. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for GoPro

Following last week's earnings report, GoPro's three analysts are forecasting 2025 revenues to be US$885.8m, approximately in line with the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 97% to US$0.07. Before this earnings announcement, the analysts had been modelling revenues of US$920.2m and losses of US$0.16 per share in 2025. While the revenue estimates fell, sentiment seems to have improved, with the analysts making a very favorable reduction to losses per share in particular.

The analysts have cut their price target 27% to US$1.35per share, suggesting that the declining revenue was a more crucial indicator than the forecast reduction in losses. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values GoPro at US$1.50 per share, while the most bearish prices it at US$1.20. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting GoPro is an easy business to forecast or the the analysts are all using similar assumptions.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would also point out that the forecast 0.9% annualised revenue decline to the end of 2025 is better than the historical trend, which saw revenues shrink 1.4% annually over the past five years Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 5.8% annually. So while a broad number of companies are forecast to grow, unfortunately GoPro is expected to see its revenue affected worse than other companies in the industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Even so, long term profitability is more important for the value creation process. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on GoPro. Long-term earnings power is much more important than next year's profits. We have forecasts for GoPro going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for GoPro that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.