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Could Apple Be Gunning For GoPro?

Apple for GoPro?

The rumor alone was enough to send the latter’s stock up 16 percent on Thursday (Dec. 10). The rumors have been stoked, in part, by sell-side analysts’ notes that have speculated that the buyout and strategic fit make sense.

The surge comes as the second analyst in the past few months posited that a deal would make sense and that Apple may indeed be gunning for the visual tech and camera firm. GoPro shares, even after the surge, are down markedly from all-time peaks of about $93. At about $19, the common stock represents a “busted IPO,” as the stock trades below the initial offering price of $24.

In the latest analyst tout, FBR Analyst Dan Ives said a deal would make sense, as Apple “works to build its software ecosystem amid saturation in global smartphone sales,” according to MarketWatch. Additionally, Ives said, “We believe GoPro would fit like a glove into the Apple product portfolio.”

Separately, in September, another analyst, Northland Capital’s Gus Richard said that wearable cameras would mark a “compelling acquisition target” for Apple across both hardware and content. Key to those areas would be virtual reality, cameras and drones, which bullish analysts say will help expand the Apple ecosystem and push back against growing competition in those areas.

And yet there is dissent in the sell-side analyst ranks. Citigroup said on Friday that it downgraded the stock of GoPro to neutral from buy and said, “We got it wrong … Our timing could not have been worse.” And the firm slashed its GoPro price target to $22 from $75, citing softening demand from GoPro products across various channels.

[bctt tweet=”And yet there is dissent in the sell-side analyst ranks when it comes to GoPro.”]

The company has been struggling as of late, with revenues of $400 million coming in well below the Street at $433 million in the latest quarter, with guidance below consensus.

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