GoPro Partners With Adobe to Boost Adobe User Experience

GoPro, Inc. GPRO recently entered into a partnership with Adobe. Notably, the deal will involve the addition of thousands of GoPro video clips to Adobe’s Stock marketplace. This will offer Adobe Creative Cloud users access to more visuals while editing videos.

Under the deal, the Adobe Stock GoPro library will be added with dramatic landscapes, aerial and underwater scenes as well as and content taken from places where GoPro has exclusive access. For licencing the clips, a la carte pricing is $79.99 for a 1080p clip and $199.99 for a 4K clip.

Recently, the company also launched its new HERO7 line of cameras. Notably, HERO7 Black — the company’s new flagship camera — witnessed record levels of social engagement at the launch. The product lineup includes the HERO7 Silver for $299 and the HERO7 White for $199, both delivering industry leading photo and video image quality, 2-inch touch displays, voice control and GoPro's trademark waterproof ruggedness.

Prevalent Scenario

GoPro has been aiming toward transforming itself from ‘camera maker’ to ‘content maker’ and has taken significant steps to diversify into higher-margin businesses including video editing and virtual reality. The company is developing various types of software solutions and hardware to curtail the complexity of managing, editing and sharing contents on different media platforms.

The company has made significant improvements to its editing software on the back of its acquisition of two most popular mobile editing apps, Replay (which has been rebranded as Quik) and Splice, which are experiencing robust adoption. The integration of these two apps has simplified mobile content creation for GoPro as well as for smartphone users, thus offering a content enabling platform to millions of users.

Notably, the Zacks Rank #3 (Hold) stock has returned 6.8% in the past three months, outperforming the industry’s growth of 1.1%.

However, the company has been experiencing huge competition between new and old products, threatening to drag down top-line growth due to product cannibalization. Further, high R&D expenses for high technological obsolescence strain margins.

Key Picks

Some better-ranked stocks from the same space are lululemon athletica inc. LULU, Boyd Gaming Corporation BYD and Amaya Inc. TSG. While lululemon athletica sports a Zacks Rank #1 (Strong Buy), Boyd Gaming and Amaya carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

lululemon athletica exceeded estimates in each of the preceding four quarters with an average positive earnings surprise of 19.22%.

Boyd Gaming surpassed estimates twice in the trailing four quarters with an average positive earnings surprise of 2.53%.

Amaya outpaced estimates thrice in the preceding four quarters with an average earnings surprise of 16.51%.

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