Analyst Downgrades: GoPro Inc, Ambarella Inc, and AeroVironment, Inc.

Analysts downwardly revised their ratings on GoPro Inc (GPRO), Ambarella Inc (AMBA), and AeroVironment, Inc. (AVAV)

by Alex Eppstein

Published on Sep 2, 2015 at 9:43 AM

Analysts are weighing in today on business partners GoPro Inc (NASDAQ:GPRO) and Ambarella Inc (NASDAQ:AMBA), as well as defense firm AeroVironment, Inc. (NASDAQ:AVAV). Here's a quick roundup of today's bearish brokerage notes on GPRO, AMBA, and AVAV.

  • GPRO has dropped 7.5% out of the gate to trade at $40.43, after a pair of troubling brokerage notes. Specifically, Raymond James slashed its price target to $50 from $71, and Morgan Stanley said it expects the camera maker to reduce inventory by year-end on China-related headwinds. On the charts, GoPro Inc rebounded impressively from its March lows to hit $65.49 in early August, but since then, has dropped 38.3%. This could be enough to shake up some Wall Street optimists. Specifically, 10 brokerage firms currently rate GPRO a "buy" or better, versus four "hold" ratings and not a single "sell." Plus, the stock's consensus 12-month price target of $76.50 stands in territory not charted since early December. A future round of bearish notes could exacerbate selling pressure.

  • AMBA reported better-than-expected quarterly earnings last night, but its third-quarter revenue forecast left much to be desired. As such, a number of analysts are jumping on the bearish bandwagon, with Morgan Stanley, Deutsche Bank, Canaccord Genuity, and Topeka Capital cutting their price targets on Ambarella Inc. Out of the gate, the stock has tumbled 11.6% to trade at $79.23, but remains 56% higher on a year-to-date basis. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), speculators have been upping the bearish ante. AMBA's 10-day put/call volume ratio of 0.98 ranks above 84% of similar readings recorded in the past 12 months.

  • As of last night's close, AVAV was down 14% in 2015. It's more of the same this morning, with the shares sliding 9.8% out of the gate to churn near $21.10 -- notching a new annual low of $21.03 along the way. Weighing on AeroVironment, Inc. is a steeper-than-expected quarterly loss, and price-target cuts at Jefferies (to $26) and Canaccord Genuity (to $24). Meanwhile, traders targeting AVAV options expiring in the next three months have been extremely put-focused, per the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.79 -- which rests in the 94th annual percentile.

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