GoPro is undervalued, stock reviewHey all, this is my first idea published, hope you'll get value from it and I'm happy to get feedback.
GoPro fell a lot after the Earnings Report published on February 4th. While many sites reported some bad news comparing 2019 to 2020 overall, there are some hidden gems that could be found if we dig deeper.
Q4 2020 Revenues from GoPro.com (the company's site) was $116M (new record), 91% higher than last year. Total Q4 Revenues are $357.77M.
Q4 2020 Gross margin was 38.3%, which reflects the continued demand for GoPro products.
Q4 2020 Net Income was $44.41M. Comfortably profitable again since Q4 2019.
Improved cash flow at the end of 2020 puts GoPro at $325.65M, 116% Growth Year over Year. Long Term Debts are only $218.2M (Good)
Total Current Assets are $556.68M compared to Total Current Liabilities of $262.69M (Good)
3.6M Camera units sold in 2020.
The current Balance Sheet Ratio is above two (2.12), meaning they have enough in the value of total existing assets to fulfill their financial obligations for at least the next 12 months. That's incredible.
With total revenue of $891.93M in 2020 and a current market cap of 1.24B, stating that GoPro is currently undervalued will be an understatement. There's a huge opportunity here.
With its current market cap, cash flow, and company's projections to...
Grow Q1 2021 revenues by 55% over Q1 2020.
Grow revenues coming from GoPro.com to be 38%-42% of overall sales.
Reach 1M subscribers by Q2 2021 and 2M by the end of 2021 (2M subscribers is a significant mark to reach, but it would represent $100 million of annual recurring revenue).
Be profitable in 2021 with $470M to $500M cash.
Even if the stock will continue to be volatile until the following earnings report and for the rest of the year, it is still in my belief. Based on other analysts' reports too, that GoPro's fair market price should be around $20 today. It's more than 100% growth.
So if projections of revenues for Q1 2021 will be achieved, the stock's value should probably even exceed $20, and by the end of the year, we might even see it reaching $30 or more.
Will be happy to hear what you think and discuss!
