GoPro (GPRO) Apple s Next Big Thing

Transcription

1 GoPro (GPRO) Apple s Next Big Thing

2 Target Overview GoPro develops both hardware and software prodcts to enable their sers to captre, manage, share and enjoy meaningfl life experiences Cameras Hero Line: newest prodct Hero4 Black Captres 4K Ultra HD videos 30 frames per second Software Waterproof p to 40M GoPro Stdio: a video editing tool for GoPro content GoPro App; allows sers to manage, store, and share content from camera to cellphone Accessories Battery BacPc, Smart Remote, Monts, other accessories Sales and Distribtion Channels Sales: 64% in Americas, 27% in EMEA Big Box Retailers: Amazon, Best By, Target, and Walmart Sells to 50 distribters in 2014

3 Target Overview (cont.) GoPro is an iconic brand that is expanding into varios markets, bt is heavily ndervaled de to nreasonable market concerns. Poor Management and Marketing has led to stock price falling Well Positioned in Virtal Reality Movement Rapid Expansion into Emerging Markets Ventring into Media and Expanding in Content Sharing

4 Financial Overview % % 15% 10% 5% Est Est % Revene EBITDA Margin Key Metrics 52-Wk Range P/E 15.2x Forward P/E 22.57x Beta 0.66 Operating Margin Profit Margin Market Cap. $2.51B EV/EBITDA % ROE 29.15% EPS Dilted $ % EPS $1.20 Free Cash Flow $129.15M

5 Indstry Overview GoPro is the leader of the action camera indstry with sizeable 47.5% market share Indstry growth rate FY15 expected to be 22% Indstry growth rate FY16 estimates of 23% 5 year expected growth rate of 14% compared to 5 year average growth rate of 12% Indstry is sffering from competition from smartphone sector Action Camera Market Share Polaroid Sony ION GoPro 0% 10% 20% 30% 40% 50% % of Market Share

6 What GoPro Can Offer Rapidly Expanding in Emerging Markets International sales totaled more than 50% of Q3 revene; combined EMEA and APAC revene over 175% year-to-year Lanched Brazil and Mnich facilities in 2014 Expanding distribtion networks to Asia (specifically China, Japan, Soth Korea) Strategic Partnerships 5 year partnership with MotoGP and title sponsorship of GoPro Motorrad Grand Prix of Detschland Official camera of the Tor de France Media partnerships with sports empires sch as NHL and ESPN Partnership with USC School of Cinematic Arts to invest in next generation of filmmakers

7 What GoPro Can Offer (cont.) Ventring into Media and Expanding Content Sharing Network Streamlining sharing efforts by shifting toward the clod and lanching a new Trimand-Share featre Premim content licensing portal and new initiative program called GoPro awards Efforts to Maintain Commanding Market Presence Consistently sets itself apart with distinct branding R&D investments p 69% year-over-year to maintain competitive market dominance Movement from hardware owner to content provider provides meaningfl expansion opportnities and long-term bsiness Well Positioned in the Virtal Reality Movement Acqired Kolor (leader in virtal reality and spherical media soltions) Released16-camera virtal reality rig bilt specifically for Google s Jmp platform Qadcopter drone is expected to release in the first half of 2016

8 Investment Risks Highly competitive market R&D increased 69% YoY indstry wide GoPro is highly prone to seasonal shopping patterns importance on spply chain operations Operations otside of the U.S. incr a portion of their operating expenses in foreign crrencies, principally the Ero and the Hong Kong Dollar Small nmber of retailers and distribtors accont for a sbstantial portion of their revene

9 Indstry Competitors Provider of navigation, commnication, and GPS information devices Manfactres and sells optical instrments internationally Engages in the car electronics, professional systems, entertainment software bsiness Designs, develops, manfactres and sells electronic eqipment and devices Manfactres and sells varios electronic and electric prodcts

10 Valation Otpt Fair Market Vale (GPRO) DCF (Growth) DCF (Mltiples) P/E EV/EBIT EV/EBITDA 52-Week Crrent Price

11 Merger Valation 55 Merger Valation (AAPL - GPRO) $ DCF w/ Synergies(Growth) DCF w/ Synergies(Mltiple) Precedent Transactions

12 Merger Details Offer $22.00 per share of GoPro 50/50 Stock and Cash Offer Accretive in the first year for Apple by $0.39 (12%)

13 Qestions?