Why Is GoPro (GPRO) Up 32.5% Since Last Earnings Report?

A month has gone by since the last earnings report for GoPro (GPRO). Shares have added about 32.5% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is GoPro due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important drivers.GoPro's Q2 Loss Wider Than ExpectedGoPro reported second-quarter 2025 non-GAAP loss per share of 8 cents, wider than the Zacks Consensus Estimate of a loss of 7 cents.  This came within the company’s forecast of non-GAAP adjusted loss of 7 cents per share (+/- 4 cents). The firm reported a loss of 24 cents per share in the year-ago quarter.GoPro generated revenues of $152.6 million, down 18% year over year. The figure was within the company’s expectation of $145 million (+/- $10 million). The top line beat the consensus mark by 3.4%.Management stated that the second-quarter performance demonstrates steady operational execution and efficiency, and it looks forward to introducing a wider, more diversified range of hardware and software products in the second half of 2025, which the company expects will drive a return to revenue growth and profitability beginning in the fourth quarter of 2025.Q2 Results in DetailsGoPro sold 500,000 camera units in the second quarter, down 23% year over year.Based on channels, revenues from GoPro.com of $41 million (27% of total revenues) plunged 16% year over year. Our estimate was pegged at $42.8 million.Subscription and service revenue amounted to $26 million, while GoPro’s subscriber base recorded 2.45 million at the end of the second quarter, marking a 3% decline year over year.Retail channel registered revenues of $111 million (73%), which fell 19% year over year. We estimated the metric to be $103.7 million.Region-wise, revenues from the Americas were up 11% from the prior-year levels. Revenues from Europe, the Middle East and Africa were down 46% year over year. The Asia Pacific region was down 43%. U.S. revenues reached $82 million in the second quarter of 2025, marking a 20% increase from the same period last year. Year-over-year revenue declines in EMEA and Asia-Pacific were due to consumer-related macroeconomic challenges, increased competition and significant channel inventory reductions in preparation for new product launches in the second half of 2025.Margin PerformanceNon-GAAP gross margin was 36% compared with 30.7% in the year-ago quarter. Non-GAAP operating loss totaled $8.5 million compared with an operating loss of $35.4 million in the prior-year quarter. Non-GAAP operating expenses were $63.4 million compared with $92.6 million in the prior-year quarter.Adjusted EBITDA loss was $5.7 million against adjusted EBITDA of $33.4 million a year ago.The subscription attach rate for cameras sold through all channels reached 56%, up from 45% in the second quarter of 2024, marking a 24% increase. Street ASP was $374, up 16% year over year.Cash Flow & LiquidityIn the quarter under review, GoPro generated $8.8 million of net cash from operating activities compared with $0.6 million in the year-earlier quarter.As of June 30, 2025, the company had $58.6 million of cash and cash equivalents.GuidanceFor the third quarter of 2025, the company projects revenues of $160 million (+/- $10 million), representing a 38% year-over-year decline.Non-GAAP gross margin is expected at 35.5% (+/- 50 bps), unchanged from last year. Street ASP is expected to be around $370, up nearly 26% year over year, while unit sell-through is projected to decline 25% to about 500,000 units, with channel inventory remaining flat.Operating expenses are projected at $60 million (+/- $1 million), down 34% from the prior year due to reduced headcount, lower marketing spend and decreased nonrecurring engineering costs following GP3’s completion.The company projects a non-GAAP loss per share of 4 cents (+/- 2 cents) for the third quarter.For 2025, the company plans to introduce two new cameras this year, including the Max 2 360.GoPro anticipates full-year operating expenses of $240–$250 million, implying a reduction of over $100 million from last year.To offset roughly half of the expected tariff costs, the company will implement modest price increases and further diversify its supply chain outside of China, while exploring the option of producing certain products in the United States.The company expects improvements in subscription ARPU and cost efficiency, finishing the year with 2.4 million subscribers.The expense and margin initiatives undertaken in 2024 are already delivering benefits, and the company is focused on leveraging new product launches in 2025 and 2026 to return to growth and profitability beginning in the fourth quarter of 2025.How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a downward trend in estimates revision.The consensus estimate has shifted -316.67% due to these changes.VGM ScoresCurrently, GoPro has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a score of F on the value side, putting it in the lowest quintile for value investors.Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, GoPro has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.Performance of an Industry PlayerGoPro is part of the Zacks Audio Video Production industry. Over the past month, Sonos (SONO), a stock from the same industry, has gained 16.9%. The company reported its results for the quarter ended June 2025 more than a month ago.Sonos reported revenues of $344.76 million in the last reported quarter, representing a year-over-year change of -13.2%. EPS of $0.19 for the same period compares with $0.23 a year ago.Sonos is expected to post earnings of $0.05 per share for the current quarter, representing a year-over-year change of +127.8%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Sonos. Also, the stock has a VGM Score of B.Free Report: Profiting from the 2nd Wave of AI ExplosionThe next phase of the AI explosion is poised to create significant wealth for investors, especially those who get in early. It will add literally trillion of dollars to the economy and revolutionize nearly every part of our lives.Investors who bought shares like Nvidia at the right time have had a shot at huge gains.But the rocket ride in the "first wave" of AI stocks may soon come to an end. The sharp upward trajectory of these stocks will begin to level off, leaving exponential growth to a new wave of cutting-edge companies.Zacks' AI Boom 2.0: The Second Wave report reveals 4 under-the-radar companies that may soon be shining stars of AI’s next leap forward.Access AI Boom 2.0 now, absolutely free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report GoPro, Inc. (GPRO): Free Stock Analysis Report Sonos, Inc. (SONO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks