GoPro slumps after analyst warns of supply difficulties, Q4 execution risk

Shares of GoPro (GPRO) took a turn lower Monday after research firm Longbow said its checks indicate potential supply difficulties for the action camera maker. LONGBOW WARNS OF SUPPLY ISSUES: Longbow analyst Joe Wittine warned Monday that his checks on GoPro's recently launched HERO5 camera "reveal unusually tight supply three weeks after initial availability." Though he conceded that bulls could interpret the news as indicating pent-up demand, Wittine views it as a negative indicator of supply failings and Q4 execution risk. His conversations with retailers revealed "little replenishment" since launch, with delivery estimates continuing to slip last week and one of Wittine's contacts at a small retailer alleging that GoPro is encountering "manufacturing problems" due to a "rushed" launch, though the analyst cautioned he couldn't corroborate the story elsewhere. The company's delay of its Karma drone to late November could also be a symptom of manufacturing strain, Wittine said, adding that the apparent execution issues "could put implied 4Q guidance out of reach." The analyst kept a Neutral rating on the shares. PRICE ACTION: Shares of GoPro ended the day down 7.03% to $13.88.