Regency Associates Says GoPro Sinks On Ambarella Guidance


Posted December 17, 2015 by regencyassociates

Regency Associates says Shares in action camera maker, GoPro, fall as key chip supplier delivers weak guidance.

 
Regency Associates said shares in GoPro, the wearable action camera maker have fallen sharply after Ambarella, the main chip supplier for most of the company’s products, issued weak guidance blamed, in part, on expectations for GoPro’s sales going forward.

Ambarella said that it expected to encounter headwinds in the holiday season because of high inventory levels [of its chips] at the customers [GoPro]. GoPro’s stock has plunged by a massive 70% in 2015 fueled by competition from cheaper rivals and marketing snafus.

“GoPro’s tried to cut the price of its Hero4Session camera to $199 from $299 having earlier cut the price from $399 in late September but to little avail,” said Ahiro Noda, technology analyst at Regency Associates.

“The stock is trading at below $18 and we think this serves as a timely reminder to investors to avoid getting caught up in hyperbole surrounding technology IPOs,” Noda added.

Despite his bearishness, Noda offered a glimmer of hope for investors nursing heavy losses. He said that GoPro was still the dominant player in a market worth $630 million in the US alone and with a new camera on the way in 2016 plus rumblings of a GoPro drone in the works, there was room for mild optimism.

Regency Associates said, however, that the biggest plus for the company was that, with its stock trading at levels significantly below its IPO price, GoPro could look appetizing to companies like Google, Yahoo or Amazon all of whom would consider it a strong strategic fit with their ambitions in content delivery.

About Regency Associates
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Categories Business , Multimedia , Technology
Tags amazon , go pro , regency associates , yahoo
Last Updated December 17, 2015