GoPro Inc (NASDAQ:GPRO) announced on Wednesday, March 15 that it affirms first quarter of the fiscal year 2017 (1QFY17) revenue to be in the upper end of its previously declared top line guidance of $190-210 million. The company reiterated its target of full year non-GAAP profitability in FY17 and forecasts EBITDA to be positive for the same period. Consequently, GPRO shares, which have fallen 15.61% since the beginning of the year, traded in green and soared about 8.84% during the late market session yesterday.
GoPro further announced restructuring plans that will push its full-year GAAP and non-GAAP operating expenses below $585 million and $495 million, respectively. This would mark a reduction of $200 year-over-year (YoY) in FY17 operating expenses. Also, the announced restructuring is unlikely to impact the company’s roadmap for new software and hardware products.
The reduction in $1.1 billion company’s expenses will be achieved using the combination of cuts to open positions, headcount, and program costs, totaling elimination of approximately 270 positions. As a result, the company expects to recognize $10 million restructuring charges during the first quarter. Nonetheless, the plan is likely to push GPRO shares higher in the market, which have lost about 41.67% of their value over the period of last 12 months.
With this restructuring, the management of the California-based company plans to enhance the company’s financial performance without drawing on GPRO’s existing credit facility. CEO Nicholas Woodman commented, “We're determined that GoPro's financial performance matches the strength of our products and brand. Importantly, expense reductions preserve our product roadmap, and we are tracking to full-year non-GAAP profitability in 2017.”
GoPro has achieved consensus 12-month consensus price target of $8.11, representing about 10.3% upside potential over the last close. Moreover, the action cameras manufacturer has acquired one Buy, nine Hold, two Underweight, and seven Sell ratings from 20 analysts covering the stock at FactSet Fundamentals