Teens love GoPro.
And so do Wall Street analysts.
Analysts at Piper Jaffray upgraded the stock after their “Taking Stock with Teens” survey showed that the company’s point-of-view cameras are getting more popular with teens.
The stock is now rated “Overweight” from “Neutral” and put a $US55 price target on shares.
Shares of GoPro were up as much as 4% to $US46.05 per share, the highest level since mid-February.
Here’s Piper’s Erinn Murphy on the upgrade:
“At this time, we are making no changes to our estimates but believe estimates will ultimately prove conservative as our consumer survey work has suggested strong adoption in the U.S. We view GPRO as a strong, authentic consumer brand that is currently benefiting from not only unit expansion but underlying pricing gains and is continuing to capture an engaged consumer who is spending more time within the GoPro ecosystem.”
Piper Jaffray polled 6,200 teens. Their average age is 16.3 and the live across 44 states.
The key findings were:
- Teen family ownership of GoPro cameras is now nearly 18%, the highest in the survey.
- Last year, 0.64% of teens had a GoPro on their wish list. That’s now at 1.57%. “The rising popularity and market share for GoPro occurs at the same time as camcorder ownership is declining,” the analysts note.
- Lastly, teens prefer social networks that are visually rich, with Instagram as their favourite. “The bottom line, we see teens spending more of their incremental social media time on visual and content enhancing platforms which ultimately is a positive for GoPro.”
GoPro shares are down 29% year-to-date. The stock tanked as investors got concerned that competition is mounting.
Chinese electronics company Xiaomi announced a 16-megapixel point-of-view camera last month, and Apple obtained a patent for a camera similar to GoPro’s products.