GoPro Inc. (NASDAQ: GPRO) is expected to fall behind its previous revenue estimates, due to the temporary shutdown of shipments to Amazon.com Inc (NASDAQ: AMZN). According to Ms. Erinn Murphy, an analyst at Piper Jaffray, this development will further adversely affect the position of the action camera company’s stock. Moreover, this can possibly dim the prospects for GoPro’s newly launched products—the Karma drone and Hero 5.
Based on the analysis of Ms. Murphy, Amazon.com is responsible for approximately 12 percent to 14 percent of the total sales of the action camera firm. Furthermore, the Piper Jaffray analyst noted that not shipping to the ecommerce leader was not a strategic problem, but rather a technical issue.
The management of GoPro has provided a clarification note in order to make the situation better, as speculations emerged indicating a fallout between the action camera maker and the ecommerce giant. The Chief Executive Officer of GoPro asserted that he considers Amazon.com as an extremely valuable partner and that he has an intention to continue shipping as soon as possible.
Several reliable sources pointed out that the ecommerce titan will be receiving shipments from GoPro towards the end of the current month. It is important to note that GoPro’s shipments to its other partners have continued just like before.
The Piper Jaffray expert stated that the mentioned delays in the shipping to Amazon will lead to a decrease in revenue for GoPro. Ms. Murphy said that the company’s revenue may plunge by $100 million, if the shipments will only resume based on the provided schedule.
In addition, the analyst asserted that there might be more factors that caused the current situation, but she did not make any lofty assumptions. Ms. Murphy also said that Piper Jaffray will thoroughly keep an eye on the situation between GoPro and Amazon. Moreover, the firm will also monitor holiday sales in order to get a better view of the picture.
With the launch of the Karma drone and Hero 5 camera during the holiday season, GoPro anticipates to get back some of its losses.
The Piper Jaffray analyst has given GoPro an Underweight rating and set a price target of $9. Currently, the GPRO stock is changing hands at $13.84, down by 3.22 percent or 0.46 points.
Out of all the analysts covering the action camera company’s stock, 2 have given it a Buy rating, 11 have rated it a Hold, 3 have maintained an outperform rating, and 2 have given it a rating of Underperform.