GoPro Jumps in Early Trading Ahead of Karma Drone Launch
Event in California holds ‘high expectations,’ JP Morgan says
Company seeks to prove it can go beyond tiny action cameras
GoPro Inc. rose as much as 6.3 percent in early trading Monday in anticipation of the launch of its new drone.
The action-camera maker will debut its drone, Karma, at 9 a.m. local time in Squaw Valley, California, followed by an analyst presentation. Paul Coster, an analyst at JPMorgan Chase & Co., said the high-profile event may signal the Karma will impress investors. GoPro may also release the next iteration of its tiny cube-shaped camera, the Hero 5, according to Tavis McCourt, an analyst at Raymond James. Both analysts rate the stock the equivalent of buy.
The shares rose to as high as $15.90 in trading before the market opened in New York.
GoPro is counting on its drone to help revive a stock that’s fallen 17 percent this year and is down almost 85 percent from its October 2014 high. Bloomberg Intelligence analyst Jitendra Waral said the Karma launch will be a “pivotal event for the company,” and a chance to renew sales growth by “jump-starting” a nascent category through its brand strength and dedicated user base.
While the details surrounding GoPro’s drone have been kept tightly under wraps, the company is entering a crowded market. Karma won’t only have to compete with the new iPhone 7 from Apple Inc. released earlier this month with an upgraded camera, but also the industry leader, SZ DJI Technology Co.