Why GoPro Jumped 11.8% Last Month

What happened

GoPro ‘s (NASDAQ: GPRO) stock jumped 11.8% in August, according to data provided by S&P Global Market Intelligence , after the company reported a stronger second quarter than analysts had expected.

So what

GoPro has fallen on some pretty hard times as the company has faced employee cutbacks , a botched launch of its Karma drone, and ongoing losses from sales of its action cameras. But the second quarter was a bit of a bright spot for GoPro, and investors were eager for some good news.

Image source: GoPro.

The company still reported a per-share loss of $0.09 in the quarter, but that was much better than the consensus earnings estimate, for a loss of $0.25. Revenue also jumped by 34% year over year; that sent the stock up nearly 22% in days following the earnings report, though some of those gains retreated by the end of the month.

In addition to the solid earnings report, GoPro’s stock was also upgraded last month by Longbow Research, Raymond James Financial, and Goldman Sachs, continuing to fuel optimism that the company may be in the early stages of a turnaround.

Now what

GoPro’s share price is still down nearly 38% over the past 12 months, but investors are looking ahead to the company’s upcoming release of its new HERO6 camera, and a new 360-degree Fusion camera later this year, to spur more device sales.

Investors are also optimistic that the company might beat analysts’ estimates in the third quarter as well. GoPro’s management issued third-quarter revenue guidance of about $300 million, which is higher than analysts’ consensus estimate of $278.5 million. If all goes according to management’s plan, then GoPro will return to non- GAAP profitability by the end of this year, which would certainly give investors something to celebrate.

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Chris Neiger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends GoPro. The Motley Fool has the following options: short January 2019 $12 calls on GoPro and long January 2019 $12 puts on GoPro. The Motley Fool has a disclosure policy .