GoPro Shares Take A Hard Hit

Action camera company GoPro saw its shares drop 27% in early trade Thursday before recovering slightly. The recovery in the stock still left it with a 19% decline at the close after lowering its quarterly and annual profit forecasts due to Hero8 Black production delays.

The rebound helped GoPro avoid its worst daily decline ever. That honor goes to the 24.2% stock plunge on Nov. 2, 2018, amid concerns about holiday discounting.

GoPro still expects its annual profits to increase by 6% to 9%, that’s considerably lower than its forecast just a few months ago of 9% to 12% annual profit growth. For the third quarter GoPro forecast revenue of $123 to $127 million, which is less than half the expectation of $311 million from Wedbush analyst Michael Pachter.

The company is shifting some of its production forecast from the third quarter to the fourth quarter, but was quick to point out this isn’t necessarily a problem. In the past they’ve had to push out production to a later quarter and have found that the demand for their product is not perishable.

GoPro has been punished in the past due to strategic mistakes and missteps, but has been performing far better in the past several quarters. The stock was just beginning to reflect this improvement, trading up from a low of $3.62 in September to a high of $5.79 recently, for a gain of 60% in less than a month. Thursday drop has erased most of the gains, although the stock is still up nearly 15% since the September low.