GoPro Launches Trade-Up Program To Ramp HERO5 Camera Sales

In what may come as a sly marketing move, beleaguered action camera maker GoPro, Inc. (NASDAQ:GPRO) , has introduced its first-ever Trade-Up Program to ramp up its camera sales. Given that GoPro hardly offers any discount, this strategic move is likely to go down well with users as they can upgrade to improved cloud-connected GoPro cameras.

Investors cheered the decision as shares of the company rose 3% to close at $8.95 at the end of regular trading session on Tuesday.

Discounted HERO5 Cameras

Currently, HERO5 Black and HERO5 Session cameras, which are the first generation GoPro cameras to offer cloud-connection, come with price tags of $399.99 and $299.99, respectively. Under GoPro's Trade-Up program, existing users will be able to exchange their HERO cameras for a discount of $100 and $50 on the latest HERO5 Black and HERO5 Session models, respectively, for a limited period.

The company is allowing users to take part in the program only through the company’s official website to boost traffic. Users can visit the Trade-Up website to choose their new camera and return the existing one. Once the cameras are received, the company will ship the latest HERO5 camera after reckoning the discount.

GoPro believes HERO5 cameras can go a long way. The company is pulling out all stops to expand its sales to match up the unprecedented success it had with its HERO 4 camera line. It remains optimistic that the new model, when combined with new software upgrades slated for 2017, can create powerful mobile storytelling experiences for users.

GoPro Firing on All Cylinders

GopPro had a disastrous run on the bourse in 2016, having slumped 51.6%, in stark contrast to the Zacks classified Audio/Video Home Products industry’s average positive gain of 11.1%. A host of issues, some market driven and others self-inflicted, marred the company’s performance. Also, year to date, the shares returned 2.6%, far below the industry’s gain of 13.2%.

To turn its fortunes around, the company has recently been firing on all cylinders to boost profitability and sales. Earlier this year, GoPro devised an elaborate cost cutting strategy that comprised reducing total workforce by 15%, shutting down its entertainment division and reducing office space. GoPro estimates elimination of 270 posts going forward. Through these efforts, the company plans to reduce operating expenses by about $650 million.

Furthermore, the company’s affirmation of its first-quarter 2017 revenues at the upper end of the $190–$210 million range last month proved to be a relief to investors. GoPro believes that its restructuring efforts will help it bring down full-year GAAP operating expenses below $585 million and non-GAAP operating expenses below $495 million. Also, it affirmed that these cost-cutting efforts will not interfere with its pipeline of hardware and software product launches.

Analysts have become increasingly bullish on the company, as the Zacks Consensus Estimate for 2017 trended up over the past month, narrowing from a loss of $1.09 to a loss of $0.47, thanks to five upward estimate revisions compared to none lower. We believe this Zacks Rank #2 (Buy) company’s streamlined portfolio, and strategic investments in talent, technology, software and innovative products will help it bounce back after a dismal 2016.

Other Stocks to Consider

Other stocks in the space include H&R Block, Inc. (NYSE:HRB) , Penn National Gaming, Inc. (NASDAQ:PENN) and Activision Blizzard, Inc. (NASDAQ:ATVI) . All three stocks carry the same Zacks Rank a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

With three out of four beats in the trailing four quarters, H&R Block has a positive average surprise of 7.7%.

Penn National has an excellent earnings surprise history, with an average positive surprise of 67.4%, beating estimates all through in the trailing four quarters.

Activision Blizzard has beaten estimates thrice over the trailing four quarters for an average surprise of 33.9%.

Zacks’ Best Private Investment Ideas

While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.

Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Click here for Zacks' private trades >>