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Trending: The topsy-turvy adventure ride of GoPro shares

Last updated: 16:30 28 Jul 2016 EDT, First published: 11:30 28 Jul 2016 EDT

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How fickle and cruel can investors' reactions to a stock get? Well, that was tested on location with GoPro Inc (NASDAQ:GPRO) makers of sports and activity camera wear, in the past 24 hours.
 
The stock gained more than 2% during Wednesday before edging lower by 0.3% to $11.54 after hours. The same cycle happened on Thursday. The stock whizzed up 12.5% to $13.02 on Thursday before edging lower after hours.
 
Initially, GoPro’s shares leapt after-hours on Wednesday as it said it would launch a new generation of its Hero action cameras as well as its long-delayed Karma drone before the holidays as it reported second quarter results.
 
However, the stock quickly gave up most of those gains despite a promise by founder Nick Woodman that the beleaguered camera company would return to profitability by the end of the year.
 
Revenues for the three months to June fell by 47% to $220.7mln but nonetheless comfortably exceeded Wall Street expectations of around $194mln. The drop completed 12 months of contracting sales for GoPro.
 
It seems as though on Thursday the company's promise of returning to profitability by year end was again the focal point - few companies get that kind of redemption.
 
Wedbush analysts put their weight behind the positive angle of the story, saying they viewed the earnings as a relief after “a series of missteps over the last six quarters,” which included a weak launch of the Hero4 device and the lack of a Hero5 launch.
 
Looking to the second half of the year, GoPro will have the launch of Hero5, as well as its Karma drone ahead of the holiday season, which analysts say would put the company on track for a rebound.
 
“We view the risk-reward profile as quite favorable at present with near-term hype about the new products likely winning out over sales questions that will not get answered until closer to the holiday season,” the analysts wrote.
 
Wedbush is maintaining its outperform rating and raised its price target to $14.50 from $13.
 
However, GoPro in May delayed the launch of its first drone until the holidays instead of June. While Woodman said the first drone has “revolutionary features,” he didn’t say what those features would be. Competition is fierce in the drone industry; GoPro is under pressure to justify the extra time it has taken.
 
Certainly, GoPro has been struggling in the past year and in a sense it is easy to see why. Until it moves into the drone sector - which itself is under threat following collisions and fears over privacy in several US states - the company is haemorrhaging potential sales to other portable devices such as smartphones. And if that wasn't bad enough, smartphones can be attached to a bike's handlebar or encased in waterproof vessels just like the GoPro.

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