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GoPro Updates 1 Key New Risk Factor
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GoPro Updates 1 Key New Risk Factor

Shares of cameras, accessories, and subscription services and software provider GoPro, Inc. (GPRO) have declined 20.5% so far this year. GoPro’s recent fourth-quarter numbers came in ahead of expectations on both its top-line and bottom-line fronts due to its focus on financial and operational focus shifts in 2020.

Driven by double-digit growth in subscription revenue and robust camera sales, Q4 revenue increased 9% year-over-year to $391 million, outperforming estimates of $382.6 million. Earnings per share at $0.41 beat the Street’s expectations of $0.35.

With these developments in mind, let us take a look at the changes in GPRO’s key risk factors that investors should know.

Risk Factors

According to the TipRanks Risk Factors tool, GoPro’s top risk category is Finance & Corporate, contributing 15 of the total 43 risks identified for the stock.

In its recent report, the company has added one key risk factor under the Tech & Innovation risk category. Compared to a sector average of 3 Tech & Innovation risk factors, GPRO has 5.

GPRO highlighted that in the past, third parties have brought IP infringement claims against it and there may be future claims as well. The risk remains that an adverse ruling could force GPRO to suspend or stop the production or sale of its products or services, redesign its offerings or pay settlement costs, license fees, damage awards, or give up some of its IP.

Additionally, GPRO may seek licenses from third parties, but they could refuse the license or ask for commercially unreasonable terms. Any of these adverse events could have an adverse impact on the company.

Hedge Fund Activity

According to TipRanks data, the Wall Street’s top hedge funds have decreased holdings in GoPro by 504.5 thousand shares in the last quarter, indicating a negative hedge fund confidence signal in the stock based on activities of 5 hedge funds. Notably, David Einhorn’s Greenlight Capital has a holding worth $30.2 million in GPRO.

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