JMP Just Hiked Its GoPro Estimates On Drone, Virtual Reality Upside

In a report published Tuesday, JMP Securities analyst Alex Gauna reiterated a Market Outperform rating and $105 price target on GoPro Inc (NASDAQ: GPRO), while raising the estimates for the company, following indications of robust demand trends, domestically and internationally.

"On the near-term demand front, checks across North America and Europe continue to point toward a healthy pace of off-season demand activity, balanced inventory levels, and an ongoing absence of any meaningful competition," the JMP Securities report explained.

The analyst expects the company to see rapid growth in the drone and virtual reality markets, leading to the TAM increasing "by billions of dollars" by 2020. GoPro reported a 70 percent increase in global brand awareness in the previous quarter.

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In addition, the investments being made by the company in software, media, people, sponsorship, virtual reality and real-time live broadcast sets GoPro ahead of the competition, while providing "almost open-ended potential" for the monetization of the Hero brand.

The non-GAAP EPS estimate for 2015 has been raised from $2.00 to $2.10 to reflect the company's entry into the drone segment in 2H16.