GoPro GPRO is set to acquire Australia-based Forcite Helmet Systems. The terms of the deal have not been divulged yet. The company noted that it will share more details of the financial deal on its fourth-quarter 2023earnings conference call which will be held on Feb 7, 2024.
The acquisition of Forcite Helmet Systems is expected to close in the first quarter of 2024 subject to customary closing conditions.
Management noted that the helmet market represents significant total addressable market or TAM expansion opportunity.
Forcite Helmet Systems specializes in embedding technology into helmets. With this acquisition, GoPro is looking to make motorcycling experience safer through tech-powered helmets. Over the long run, the company is planning to expand the technology to other categories of helmets.
GoPro, Inc. Price and Consensus
GPRO believes this to be a long-term growth opportunity. It intends to capitalize its brand reputation across all forms of motorsports along with its technical/operational abilities to explore this particular revenue-generating opportunity. The company will be developing a GoPro-branded line of helmets.
GPRO will also be teaming up with other prominent helmet brands to help “tech-enable” their helmet lines.
Founded in 2002 and headquartered in San Mateo, CA, GoPro is one of the leading manufacturers of the world's most handy camera and enabler of some of today's most immersive and engaging content. GoPro manufactures mountable and wearable capture devices such as action cameras and related accessories. Its core product is the HERO line of capture devices.
GoPro’s performance is being cushioned by a higher subscriber base and an expansion of its retail presence. The company’s subscriber base rose 20% year over year in the third quarter. It also plans to restore its retail presence to pre-pandemic levels.
Introduction of a new Quik desktop app and a premium GoPro subscription tier will boost subscriber growth. Management now suggests 2023 revenues and unit sales to be ahead of its earlier guidance. Revenues are anticipated to be $1.04 billion (+/-$5 million) compared with the prior projection of $1.03 billion (+/-$30 million).
However, higher sales of lower-margin entry-level cameras are affecting its margin performance. The company expects uncertain macroeconomic conditions to keep consumer spending under pressure in the fourth quarter. Stiff competition and increasing expenses are concerning.
At present, GoPro carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks worth consideration in the broader technology space are Watts Water Technologies WTS, NETGEAR NTGR and Blackbaud BLKB. While NETGEAR currently sports a Zacks Rank #1 (Strong Buy), Watts Water and Blackbaud carry a Zacks Rank of 2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Watts Water Technologies’ 2023 EPS has improved by 1% in the past 60 days to $8.08.
WTS’ earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 11.8%. Shares of WTS have jumped 29.9% in the past year.
The Zacks Consensus Estimate for 2023 is pegged at a loss of 9 cents per share for NETGEAR, which remained unchanged in the past 30 days. NTGR’s earnings outpaced the Zacks Consensus Estimate in three of the last four quarters while missing once. The average surprise was 127.5%. Shares of NTGR were down 30.4% in the past year.
The Zacks Consensus Estimate for Blackbaud’s 2023 EPS has improved by 1% in the past 60 days to $3.86.
BLKB’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average surprise being 10.6%. Shares of BLKB have gained 33.7% in the past year.
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