GoPro Valuation

[ThetaMale]

I just did the numbers on this one, but I'm interested in this. More cash than debt, and they don't hold inventory long. It looks like it might be piling up a bit right now, but historically not the norm. They had a few years where they struggled to make money, but recently, they seemed to have turned things around. They've seen consistent revenue growth and have now started to turn a profit again. I'm more interested in this company than Jefferies, and retail is an industry I understand. What I want to look for with this is how they manage their inventory. If they're consistently holding high stock, they are not selling their product and increasing holding costs and incurring opportunity costs. Working an ever-growing inventory gets increasingly labor intensive and strains the workers. From my initial glance, though, they do an excellent job of managing their inventory even with the massive supply chain disruptions. They have also been paying down debts in recent years and taking advantage of their low tax burden. I think of GoPro when I think of wearable or mountable cameras, and I have even heard people refer to cameras like this as a GoPro. In my mind, this stock already checks many positive boxes.

 

[quickfeet]

P/E Current 2.95
P/E Ratio (w/ extraordinary items) 3.18
P/E Ratio (w/o extraordinary items) 4.53
Price to Sales Ratio 1.45
Price to Book Ratio 2.62
Price to Cash Flow Ratio 7.34
Enterprise Value to EBITDA 6.06
Enterprise Value to Sales 0.67

A few years back I tried to understand fundamental analysis, as far as trying to find "value stocks"

As far as I can tell these numbers show that the stock is a good value from a (very) high level perspective

I'll try and jump in more and polish up on some of these concepts

 

[ChicagoFats]

Cant buy companies i dont believe in.

The apple camera phone is much better than a gopro so i can't justify having a go pro.

Why would someone want a separate device? Very few use cases i an think of where an actual go pro would be better than an iphone.

 

[Scrouch2434]

@ChicagoFats
Totally agree. I have/had one. Used it once to film jumping off Macau Tower. No idea if I still have or gave away

 

[ChicagoFats]

@ChicagoFats
Totally agree. I have/had one. Used it once to film jumping off Macau Tower. No idea if I still have or gave away

Well, can we at least see the video? You jumped off a tower? Pretty ballsy!

 

[Scrouch2434]

Well, can we at least see the video? You jumped off a tower? Pretty ballsy!

Best I can do for now. I’ll see if I still have it on my desktop.

 

[absoluteUnit]

Best I can do for now. I’ll see if I still have it on my desktop.View attachment 127064

Those are some handsome calves you have there

 

[Rube Reaper]

You rubes crack me up! Vaccines are killing people and GoPro is a good buy!

What’s next? Man eating Canada geese?

 

[absoluteUnit]

You rubes crack me up! Vaccines are killing people and GoPro is a good buy!

What’s next? Man eating Canada geese?

I saw some geese on the road today. It was very pleasant

 

[absoluteUnit]

You rubes crack me up! Vaccines are killing people and GoPro is a good buy!

What’s next? Man eating Canada geese?

How are you doing Rubert?

 

[milktoast]

Cant buy companies i dont believe in.

The apple camera phone is much better than a gopro so i can't justify having a go pro.

Why would someone want a separate device? Very few use cases i an think of where an actual go pro would be better than an iphone.

It doesn’t seem like they are offering any new groundbreaking products either

 

[Rube Reaper]

How are you doing Rubert?

Good. I am so thankful I got vaccinated for the monkeypox! It’s scary seeing the people I’ve been sleeping with start getting sores and then being completely forgotten by society.

 

[quickfeet]

@ThetaMale after you do this, could you consider the following companies for analysis?

Xilinx
Intel
Altera
NVDA
AMD

 

[ThetaMale]

Cant buy companies i dont believe in.

The apple camera phone is much better than a gopro so i can't justify having a go pro.

Why would someone want a separate device? Very few use cases i an think of where an actual go pro would be better than an iphone.

I respect @ChicagoFats opinion a lot, and most times, hearing him go against a trade will cause me to pause, but I'm going to buck this time.

You're not the only one that seems to share this sentiment. If you google it, you'll find tons of articles about how the camera industry is dead, and everyone only uses their phones. I don't buy it, though. I think photography has declined, and we will eventually see a resurgence. However, I don't think the phone will replace the camera, especially when it comes to hobbyist photographers and content creators.

Just because most consumers are using their phones for videography doesn't mean that there aren't people still using cameras. Artists often want more than one camera to get multiple angles when recording. GoPros are great for getting those extra shots and angles. They're small, and you can mount them on just about anything. They're sturdy, so you don't have to worry about the elements so that you can mount them outside for a time-lapse video. If you look into it a bit more, you'll also notice a growing market of drone users purchasing their Hero Bones designed to be mounted on drones.

Simply as a business, GoPro has a lot going for it. My Valuation ONLY includes their cash and marketable securities. We can add the components from their inventory because those would likely be easy to sell off, but I didn't do that. If GoPro were to go under, I'm very confident in my terminal value number, but I don't think they will go out of business.

I did a bit of digging, and they have over 1000 patents. Some of them are for auto-exposure techniques and wind noise reduction software. They have a patent for the case that houses the GoPro, and I keep finding more patents that solidify their spot as the "Toughbook" of cameras. I've seen cheap knockoffs of the GoPro, but they seem to own the space of photography named "action photography." Their closest competitor, the Osmo, is sold at about $300 and is a worse camera.

 

[ChicagoFats]

I respect @ChicagoFats opinion a lot, and most times, hearing him go against a trade will cause me to pause, but I'm going to buck this time.

You're not the only one that seems to share this sentiment. If you google it, you'll find tons of articles about how the camera industry is dead, and everyone only uses their phones. I don't buy it, though. I think photography has declined, and we will eventually see a resurgence. However, I don't think the phone will replace the camera, especially when it comes to hobbyist photographers and content creators.

Just because most consumers are using their phones for videography doesn't mean that there aren't people still using cameras. Artists often want more than one camera to get multiple angles when recording. GoPros are great for getting those extra shots and angles. They're small, and you can mount them on just about anything. They're sturdy, so you don't have to worry about the elements so that you can mount them outside for a time-lapse video. If you look into it a bit more, you'll also notice a growing market of drone users purchasing their Hero Bones designed to be mounted on drones.

Simply as a business, GoPro has a lot going for it. My Valuation ONLY includes their cash and marketable securities. We can add the components from their inventory because those would likely be easy to sell off, but I didn't do that. If GoPro were to go under, I'm very confident in my terminal value number, but I don't think they will go out of business.

I did a bit of digging, and they have over 1000 patents. Some of them are for auto-exposure techniques and wind noise reduction software. They have a patent for the case that houses the GoPro, and I keep finding more patents that solidify their spot as the "Toughbook" of cameras. I've seen cheap knockoffs of the GoPro, but they seem to own the space of photography named "action photography." Their closest competitor, the Osmo, is sold at about $300 and is a worse camera.

First, im not arguing about valuation because admittedly i have no idea. And i don't want to derail your thread because it is about valuation. That being said, I can only invest in companies that i believe in. Just to counterpoint some of your arguments.

1) Camera use has declined .... I think it would be really hard to argue that overall camera use has declined. Just look at instagram, snapchat, tik tok, facebook etc. Its all based around the camera. Has camera use declined OR has it transferred away from the traditional hand held camera? Sure there will always be hobbyist and certain high end content creators that will use the more traditional style camera, but that is going to be a niche market and not the masses.

2) Content creators that use multiple cameras for different angles and shots are certainly buying a lot of cameras, but its not the go pro i don't think. I have researched those cameras and there are a lot of specialty cameras designed specifically for content creators. GoPRo, whether they like it or not, has branded itself, as a camera to use while on the move, not in a studio.

3) They're good for on the move, they are small, they are sturdy, you can mount them, they are weatherproof, you can mount them on a drone. ..... All things you can say about the iphone, possibly with the exception of a drone mount. Drone mounting is again going to be a niche market and could still technically be done with an iphone although admittedly it wouldnt be ideal.

So again, i know nothing about the valuation, but there is too much competition from the iphone to expect much growth from the Gopro in my humble opinion!

 

[quickfeet]

I just did the numbers on this one, but I'm interested in this. More cash than debt, and they don't hold inventory long. It looks like it might be piling up a bit right now, but historically not the norm. They had a few years where they struggled to make money, but recently, they seemed to have turned things around. They've seen consistent revenue growth and have now started to turn a profit again. I'm more interested in this company than Jefferies, and retail is an industry I understand. What I want to look for with this is how they manage their inventory. If they're consistently holding high stock, they are not selling their product and increasing holding costs and incurring opportunity costs. Working an ever-growing inventory gets increasingly labor intensive and strains the workers. From my initial glance, though, they do an excellent job of managing their inventory even with the massive supply chain disruptions. They have also been paying down debts in recent years and taking advantage of their low tax burden. I think of GoPro when I think of wearable or mountable cameras, and I have even heard people refer to cameras like this as a GoPro. In my mind, this stock already checks many positive boxes.

Also, if it's not too much of a burden, when you say "did the numbers" could you help provide the numbers, or at least provide some reference

I would like to participate and learn

I recognize you are providing great content for the forum, and don't want to overreach, but I think it would be useful for some of us