Can anybody explain to me why GoPro (GPRO) trades so low?
Some of the fundamentals are downright crazy good (P/E at 2.3, forward P/E at 5.5, RoE at 90%), and I don't see any red flags in the financials. Revenue and income growth is spotty, but it has a great cash position and very little debt. Cash per share is roughly half the stock price, which already seems crazy for a profit generating company. Earnings estimate for the future looks good.
Outside of numbers, it has a strong brand, is well established among younger consumers, and product reviews are ok. For a generation that places more emphasis on showing off how cool they are, it seems well positioned.
While I can imagine revenue taking a hit with a recession around the corner (nobody spends money on high priced gadgets when they need to put food on the table), but long-term outlook seems strong to me.
And yet the price keeps dropping. I already have a position in GPRO, and wonder now if I should double down.
So…what am I missing? Is it just bad market sentiment depressing the price (making it a great long term buy opportunity) or is there something fundamentally flaws with a company that cheap compared to its earnings?
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