Indeed, the pandemic has accelerated digital transformation and pushed many companies to become self-reliant, and GPRO is no exception. Favorably, the company's DTC sales now account for nearly 34% of the overall revenue, almost three times more than 2019's DTC revenue composition. Such moves have led to meaningful cost savings, and this is evident in the company's financials as the operating expenses decreased in 2020, with only a slight increase in 2021.Īuthor's Calculations using numbers from GuruFocusĮventually, during 2020, the company has made a strategic shift in its sales channel strategy, moving direct-to-consumer (DTC) through its website and becoming less reliant on resellers. It is important to note that following the introduction of the 2020 restructuring plan, the company has reduced 20% of its global workforce and consolidated office facilities. Next, in 2016 the company reported a severe plunge in operating margins at negative 30%, but since then, the company managed to limit its losses, with margins turning positive in 2021. In 2015 the company's revenue reached all-time high levels at $1.62 billion, but since then, the Management has struggled to drive operational efficiency, reporting negative operating margins. Therefore, I classify GPRO as a compelling turnaround case and qualify with a buy rating.ĭata by YCharts The Company's Operational Performance Despite the lack of strategic direction, poor Management, product failures, and value deteriorating acquisitions, the company's turnaround plan is overlooked by the market, but the first signs of transformation are here. ( NASDAQ: GPRO) has completely wiped out investors from its all-time high levels close to $90 per share shortly after its IPO, down to nearly $2 a share. Marekuliasz/iStock Editorial via Getty Images Investment Thesis:
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |