GoPro, Inc. (GPRO) shares surged 29.23% Wednesday after the action camera company impressed investors with the growth of its subscription service GoPro Plus. The firm said its new flagship HERO9 Black camera has helped drive its subscriber base over 500,000, up from 400,000 in August. Moreover, the company expects to exceed its subscriber growth target of 600,000 to 700,000 between now and the end of the year if the current take-up continues.
“Thanks to a stellar global launch of HERO9 Black, our paid GoPro subscriber count is ahead of where we expected to be at this time and bodes well for us to exceed our previously-stated target of 600,000 to 700,000 paid subscribers by year-end,” said GoPro founder and CEO Nicholas Woodman, per PR Newswire.
As of Oct. 8, 2020, GoPro stock has a market capitalization of $1.01 billion and trades nearly 50% higher on the year. Gains have accelerated over the past three months, with the shares up 33%, outperforming the sector over that time by around 10%.
Promotions Helping Drive Subscribers
Whether the company can retain its subscriber base over the long term remains to be seen. To attract new members, GoPro has offered a range of enticing promotions in 2020, such as discounts, bundle deals with a camera, and free trial periods. The real test will be if these newcomers continue to pay up for their subscription when these sign-on sweeteners end.
Wall Street View
Most analysts are waiting to see if GoPro can continue to grow its subscriber base post-COVID and if members are prepared to pay extra for premium services. Currently, the stock receives 3 ‘Hold’ ratings, 1 ‘Buy’ rating, and 2 ‘Sell’ ratings. Price targets range widely from $8 at the high end to $2.50 at the low end. At yesterday’s close, the shares trade 33% above analysts’ 12-month consensus price target of $4.83.
Technical Outlook and Trading Tactics
GoPro shares broke above both a long-term downtrend line and the neckline of an inverse head and shoulders chart pattern on Wednesday’s stock-specific news. The move, which occurred on above-average volume, may act as a catalyst for a trend change back to the upside. Traders who play the breakout could place a stop-loss order either at the midpoint of yesterday’s wide-ranging day or just below the downtrend line at around $4.90, depending on risk tolerance. Consider booking profits at either $11 or $17 – both areas of crucial overhead resistance.