Deep Dive: GoPro
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What do they do? GoPro sells active lifestyle cameras and accessories, plus software for video editing and other tools.
History? Founded by Nick Woodman in 2002. He is still the CEO.
Industry? There is a $7.5 billion market for lifestyle cameras. Biggest competitors are smartphone makers like Apple, Google, Samsung, etc.
Management? Current CEO is Nick Woodman, who has a controlling stake. There is about an 8% short interest.
Valuation? (As of recording) P/S of 2.1, P/GP of 6, 14 million options outstanding out of 151 million shares.
Earnings? 2020 revenue down 25%, grew GoPro subscribers by 145% YoY in
Balance Sheet? $326 million in cash, $280 million in debt (mainly from convertible notes).
Potential Competitive Advantages? Niche, brand, and expertise were choices we had. Nothing stood out to us though.
Future Growth Opportunities? Going DTC with GoPro.com, subscriptions, and more software tools.
Highlights? DTC transition and recovering from the dark days to a more efficient business model.
Lowlights? Hard to see how big the market is for their products, hardware is a tough business, and not much confidence in the CEO.
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Disclosure: The authors and podcast guests are not financial advisors. Brett Schafer and Ryan Henderson are portfolio managers at Arch Capital. Clients of Arch Capital may hold securities discussed on this podcast.