Benzinga - by Zacks, Benzinga Contributor.
Have you assessed how the international operations of GoPro (NASDAQ: GPRO) performed in the quarter ended March 2024? For this action video camera maker, possessing an expansive global footprint, parsing the trends of international revenues could be critical to gauge its financial resilience and growth prospects.
The global economy today is deeply interlinked, making a company's engagement with international markets a critical factor in determining its financial success and growth path. It has become essential for investors to comprehend how much a company relies on these foreign markets, as this understanding reveals the firm's potential for consistent earnings, its capacity to harness different economic cycles, and its overall growth prospects.
Being present in international markets serves as a counterbalance to domestic economic challenges while offering chances to engage with more rapidly evolving economies. However, this kind of diversification introduces challenges like currency fluctuations, geopolitical uncertainties and varying market trends.
Upon examining GPRO's recent quarterly performance, we noticed several interesting patterns in the revenue generated from its international segments, which are commonly analyzed and observed by Wall Street experts.
The company's total revenue for the quarter amounted to $155.47 million, showing decrease of 11%. We will now explore the breakdown of GPRO's overseas revenue to assess the impact of its international operations.
Decoding GPRO's International Revenue Trends
During the quarter, Europe, Middle East and Africa contributed $52.01 million in revenue, making up 33.5% of the total revenue. When compared to the consensus estimate of $42.06 million, this meant a surprise of +23.65%. Looking back, Europe, Middle East and Africa contributed $94.81 million, or 32.1%, in the previous quarter, and $46.02 million, or 26.3%, in the same quarter of the previous year.
Asia and Pacific area countries generated $26.86 million in revenues for the company in the last quarter, constituting 17.3% of the total. This represented a surprise of -24.07% compared to the $35.38 million projected by Wall Street analysts. Comparatively, in the previous quarter, Asia and Pacific area countries accounted for $73.71 million (25%), and in the year-ago quarter, it contributed $39.19 million (22.4%) to the total revenue.
Projected Revenues in Foreign Markets
For the current fiscal quarter, it is anticipated by Wall Street analysts that GoPro will report a total revenue of $170.71 million, which reflects a decline of 29.2% from the same quarter in the previous year. The revenue contributions are expected to be 38.3% from Europe, Middle East and Africa ($65.41 million) and 32.1% from Asia and Pacific area countries ($54.87 million).
For the full year, the company is expected to generate $932.6 million in total revenue, down 7.3% from the previous year. Revenues from Europe, Middle East and Africa and Asia and Pacific area countries are expected to constitute 30.7% ($286.34 million) and 25.7% ($239.93 million) of the total, respectively.
Final Thoughts
The dependency of GoPro on global markets for its revenues presents a mix of potential gains and hazards. Thus, monitoring the trends in its overseas revenues can be a key indicator for predicting the firm's future performance.
In an era of growing international interdependencies and escalating geopolitical disputes, Wall Street analysts are vigilant in tracking these trends for businesses with a global reach, in order to refine their predictions of earnings. It should be noted, however, that a multitude of other elements, such as a company's domestic position, also play a significant role in shaping the earnings forecasts.
We at Zacks strongly focus on the dynamic earnings forecast of companies, given that empirical studies have demonstrated its potent impact on the immediate price movement of stocks. Invariably, there's a positive relationship -- upward earnings predictions often result in an increase in stock prices.
The Zacks Rank, our proprietary stock rating tool, comes with an externally validated impressive track record. It effectively utilizes shifts in earnings projections to act as a dependable barometer for forecasting short-term stock price trends.
At present, GoPro holds a Zacks Rank #3 (Hold). This ranking implies that its near-term performance might mirror the overall market movement.
Examining the Latest Trends in GoPro's Stock Value
The stock has declined by 12.6% over the past month compared to the 1.3% rise of the Zacks S&P 500 composite. Meanwhile, the Zacks Consumer Discretionary sector, which includes GoPro, has decreased 2% during this time frame. Over the past three months, the company's shares have experienced a loss of 32.9% relative to the S&P 500's 4.3% increase. Throughout this period, the sector overall has witnessed a 4.6% decrease.
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