GoPro Surges 85% After Markiplier Stake, $285M Starman Deal
GoPro's $294M market cap and negative earnings contrast with the 85% rally. GuruFocus's GF Score is 39 out of 100.
GoPro shares surged about 85% on Tuesday after YouTube creator Markiplier became the largest individual shareholder and the company announced a merger with Starman Optical that includes a $285 million cash payout to shareholders.
The stock's jump extended a prior two-day rally that nearly doubled the share price. The cash payment translates to $1.14 per share. The merger aims to pivot GoPro into new markets while continuing support for its core product lines, the company said.
The action-camera maker has been unprofitable, with negative operating margins of -21.13% and a market capitalization of $294 million. Its earnings per share stood at -$0.99. GoPro trades at a price-to-sales ratio of 0.45, below its historical median of 0.68 and below the industry median, GuruFocus data shows.
Valuation and Financial Health
GuruFocus's GF Value metric, which estimates intrinsic value based on historical multiples, puts GoPro's fair value at $0.82 per share. That implies the stock trades about 94.5% above that level. The metric relies on growth assumptions that may be unreliable for a loss-making company, GuruFocus notes.
The company's GF Score, a composite of profitability, growth, financial strength, valuation, and momentum, stands at 39 out of 100. Profitability scored 2 and financial strength scored 3, reflecting negative earnings and a distressed Altman Z-Score of -3.25. Growth scored 4, with revenue declining 12.5% over three years. Valuation and momentum scored 7 each, driven by the recent price appreciation.
GoPro operates globally, with its largest revenue contribution coming from the Americas, followed by Europe, the Middle East, Africa, and Asia-Pacific. Balance sheet metrics include a current ratio of 0.57.
GuruFocus data shows two prominent institutional investors hold GPRO positions, with one increasing their stake. No insider purchases have been reported in the past 12 months, while insiders sold about $0.3 million worth of shares.
The $285 million cash payment to shareholders translates to $1.14 per share.
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