A few thoughts on GPRO

I have never followed GPRO, not even a little, so when I read about the “dismal” report and worried how it might affect AMBA, I looked up the report. I discovered the following: The “dismal” report was for revenues up 43%… and earnings per share up 100%…Oh well!

Saul

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Let me be clear: I’m not saying you should buy GPRO. I know nothing about it. I just don’t see how their biggest client having sales up 43% will be a crushing blow for AMBA.

Saul

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GPRO is AMBA’s largest single customer. Unit’s shipped were down 3.3% qoq. Inventory grew 32% qoq. Inventory turns 3.4 vs Q2 4.7xs. Inventory days 122.3 vs 87.7 2Q. Q4 revenues guided down 130-180M lower than consensus. This is for what should be THE quarter for GPRO. If they are guiding down for the Xmas Q, what near term catalyst is there? AMBA may be able to make up GPRO’s sales drop elsewhere, but with their earnings report not coming until December I’m afraid that until then the market will be looking at AMBA as a “show me” stock.

Rob
No position GPRO

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GPRO is AMBA’s largest single customer. Unit’s shipped were down 3.3% qoq. Inventory grew 32% qoq. Inventory turns 3.4 vs Q2 4.7xs. Inventory days 122.3 vs 87.7 2Q. Q4 revenues guided down 130-180M lower than consensus. This is for what should be THE quarter for GPRO. If they are guiding down for the Xmas Q, what near term catalyst is there? AMBA may be able to make up GPRO’s sales drop elsewhere, but with their earnings report not coming until December I’m afraid that until then the market will be looking at AMBA as a “show me” stock.

Thanks Monyman, as I said, I don’t know anything about GPRO. My first glance was too superficial.
Saul

but with their earnings report not coming until December I’m afraid that until then the market will be looking at AMBA as a “show me” stock.

Gotta love those 3 month long blue light specials.

Cheers
Qazulight

Didn’t keep it from hurting AMBA, though.

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"If they are guiding down for the Xmas Q, what near term catalyst is there? "

wasn’t this impact somewhat already priced in when AMBA reported last month? or was GPRO actual report worst than anticipated for AMBA?

more than 30% of AMBA’s revenue is coming from GPRO, right? what revenues could make that up or soften the blow for AMBA?

tj

Last Q 10% or AMBA’s revs came from drones. While QCOM is entering the area; it’s chips won’t be available until 2016. AMBA has relations with one of the top drone makers DJI. Drones may be a hot item for Xmas. Also, AMBA is in the new TASR body cam. Security cameras is also a growth area.
And while GPRO’s guidance was definitely a disappointment remember Xiaomi priced their cameras at less than 1/2 of GPRO’s price points. One of GPRO’s mistakes which they admitted was pricing that was too aggressive.
Xiaomi didn’t make that mistake and is big in China. Xiaoma is an AMBA customer.

The fact that GPRO went to new lows shows that their guidance was not as anticipated. So how could it be anticipated for AMBA?

Just some thoughts.

Rob

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