Why GoPro stock may continue to climb in 2022
On Dec. 16, GoPro, Inc. (NASDAQ:GPRO) announced the release of its fourth annual Million Dollar Challenge video, which featured highlight reel video captured exclusively on the company’s newest flagship HERO10 Black camera by users. The video showed 70 clips, which made the final cut, with 61 of these creators receiving $16,393.44 for their submissions.
Since gapping above the 40-day moving average in early November, the stock has enjoyed mostly upward momentum, with support coming from the aforementioned 40-day. While familiar pressure at the $12 level kept a lid on some of this positive price action, GPRO still boasts a 26% year-over-year lead.
Analyst sentiment, meanwhile, is split, with three calling GPRO a "buy" or better, and four saying "hold" or worse. Meanwhile, the 12-month consensus price target of $12.30 is a 14.6% premium to current levels.
Elsewhere, short sellers are starting to slowly hit the exits, with short interest down 1.4% in the last reporting period. There's still plenty of pessimism to be unwound, though. The 14.50 million shares sold short make up a solid 11.4% of the stock's available float, and it would take over a week to cover these positions, at the equity's average daily pace of trading.
From a fundamental point of view, GoPro stock has a decent valuation, with an attractive forward price-earnings ratio of 9.69 and a price-sales ratio of 1.51. GRPO has also maintained fairly consistent annual top- and bottom-line growth in recent years, with the exception of fiscal 2020 -- attributed primarily to the pandemic. In addition, GoPro has grown revenues 26% and increased net income by $430 million since fiscal 2020.
Moreover, GoPro is expected the grow its earnings by 10.6% and its revenues 7.2% in 2022. GPRO also holds a solid balance sheet with $378.54 million in cash and $284.36 million in total debt, adding a layer of security for the business over the coming years and making GoPro stock a viable value play for investors right now.