Shares of GoPro Inc. (NASDAQ: GPRO) had a rough week prior to Friday, with a boutique firm’s research report causing the stock to hit all-time lows. On Friday came another research report signaling further uncertainty for the remainder of 2015.

Oppenheimer’s report came from Andrew Uerkwitz, Martin Yang and Paul Dean. With a Perform rating, effectively a Neutral or Hold rating at other firms, Oppenheimer has no price target. Still, it sees an unclear picture into the rest of the year.

With the manner in which GoPro shares have performed over the past 52 weeks, the report says that an investor should be wearing a GoPro to capture the adventure: “… as the chart represents a death defying downhill run, or if we look just at the past 8 weeks, a base jump.”

With issues such as the upcoming earnings later this month, deciding how holiday sales will go or how the 2016 estimates may change, Oppenheimer’s report says it would rather make the base jump. The firm said:

We can point to as many positives as negatives. This note should serve as a primer for the most important items to think about into and out of the quarter. We also update our model with lower fourth quarter of 2015 and 2016 estimates.

After initiating the company with a bearish outlook in 2014 (at $80.09 by the way), the Oppenheimer team finds many conflicting factors that may swing sentiment either way. Among these are some of the following issues: average sales price trends are unfavorable, and those average sales prices may have peaked in 2014 (due to an early discount on Hero4 Session and the lack of flagship model refresh). Oppenheimer now expects that GoPro will offer a new round of discounts to Hero4 Black and Silver into the holiday season.

ALSO READ: 3 Top Jefferies Hidden Value Stocks to Buy Now
The firm also questions whether being in more stores translates to more sales. GoPro has a strong retail presence, growing its total retail outlets to over 40,000 from 25,000 in a year. Friday’s report signals that the second half of 2015 sell-through data points from those new stores are critical to make calls for 2016.

Oppenheimer believes that the street’s consensus estimates are simply too generous. The following changes have been made to lower expectations for fourth-quarter 2015 and fiscal 2016 revenues and earnings per share (EPS) estimates:

• Q4 estimates of $723 million in sales and $0.91 EPS were lowered to $687 million and $0.69 EPS.
• For 2016, estimates of $2.175 billion and $1.83 EPS were lowered to $1.984 billion in sales and $1.39 EPS.

Oppenheimer’s report from Friday said:

The cuts in the fourth quarter was attributed to weaker expected performance in North America. Our 2016 estimate changes assume no quad-copter revenues, continued decline in the core camera market, higher operating expenses, and minimum media content monetization. We believe that the consensus is overly optimistic about 2016. … but our estimates reflect an irreversible structural decline in the camera market. This holiday season will go a long way in determining who is right. … Our Fiscal 2015 and Fiscal 2016 revenue projections are based on unit shipment growth of 46% and 8%, respectively.

ALSO READ: Oppenheimer Upgrades 2 High-Yielding MLPs Despite Ugly Sector View

Three additional negatives were cited in the report. Oppenheimer thinks competitors may have superior expertise in design, technology and user experience. It sees limited opportunities in camera and camcorder markets, due to ubiquitous smartphone adoption, and poor software interface and weak control over the key component road map.

Oppenheimer did actually issue an upside scenario. This is if its assumptions were too negative. It said:

We believe the largest potential revenue driver would be quadcopters, expected to launch in late 2016. We expect the product to command higher ASP than GoPro’s camera products without damaging GoPro’s overall margin profile. We believe GoPro will benefit from its expansive distribution network to sell and service its quadcopter products.

While most of the report is cautious on GoPro, the shares were up on Friday morning. At one point during the morning the stock was up over 6% at $29.44 on active volume. The consensus analyst price target is $62.77 and the 52-week range of $27.07 to $89.89.

History has proven that Oppenheimer was right to be cautious up around $80.00 or so. But maybe staying negative after this long, and a day after all-time lows, may just be too much for many investors to keep chasing.

ALSO READ: The 10 Worst States for Women

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.