GoPro's Growth Is 'Content Enablement,' But What Does That Mean?

Morgan Stanley commented on GoPro Inc (NASDAQ: GPRO) Thursday following meetings with the company's CEO Nick Woodman and CFO Jack Lazar. The firm maintained an Equal-weight rating and $57 price target.

Analysts led by James E. Faucette felt that "GoPro's leadership in video editing and automation" was the "key to sustaining long-term growth."

The company's management wanted to expand from selling devices and move towards "content enablement." This meant "streamlining content access" and making the video editing process easier, according to the analysts.

The conversations with management focused on Research & Development efforts, which were described as "a balanced investment in software to address the various pain points including cloud syncing, mobile editing and ‘templatizing' attractive content."

Read Why JMP Wants You To Buy GoPro Shares Right Now

Monetization opportunities were seen in the form of "software and services to help customers maximize their investments in GoPro devices," however, such opportunities would require the "company's media efforts to be at a larger scale," Faucette noted.

Device pricing was also discussed and management acknowledged that lower-priced competitive products were "nothing new" and that they had confidence in "GoPro's brand awareness to drive continued market share gains."

The analysts commented that they would monitor the development of the company's software and felt that its development would "be a necessity as the company looks to maintain growth rates beyond the POV category that would justify current valuations."

Whether the stock moved towards a bull or bear scenario would depend on "the company's success in automating the editing and sharing process," Faucette concluded.

GoPro recently traded at $43.52, up 1.1 percent.