Why Analysts May Hold the Key to the Next GoPro Inc (GPRO) Low

GoPro Inc (GPRO) almost hit a record low earlier

by Alex Eppstein

Published on Sep 29, 2015 at 10:50 AM
Updated on Jun 24, 2020 at 10:16 AM

GoPro Inc (NASDAQ:GPRO) is currently 2.9% higher at $30.54, but earlier this morning touched an annual low of $28.90. In fact, the stock was just a stone's throw from its record low of $28.65, notched on its first day of trading in June 2014. As we mentioned late last week, there are plenty of bearish traders counting on continued struggles for the action camera maker's shares.

Specifically, short interest has been on the rise. Over the past two reporting periods, short interest on GPRO more than doubled, and now represents close to one-third of its total float. This pessimism stands in stark contrast to the bullish holdouts in brokerage land. Despite the stock's chronic underperformance, nine of 13 analysts still consider GPRO a "buy" or better, with not a single "sell" opinion to be found. What's more, the security's consensus 12-month price target of $70 more than doubles current levels. All things considered, the shares could be vulnerable to downgrades and/or price-target reductions -- which may pressure them to even lower lows.

In the options pits, sentiment appears to be more mixed. The equity's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.59 ranks in the middling 51st annual percentile -- suggesting option traders are buying to open puts and calls at around their typical rates. In today's action, though, GPRO puts are crossing at twice the normal rate and outstripping calls by a roughly 5-to-4 count.

As alluded to, GoPro Inc (NASDAQ:GPRO) has been getting roughed up on the charts for quite some time. Year-to-date, the shares have surrendered over half their value, and they've also underperformed the broader S&P 500 Index (SPX) by 47 percentage points over the last two months.

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