While camera maker GoPro is experiencing a rising popularity among young people, some analysts are not giving it the same amount of praise.
GoPro's stock saw a 4-percent drop to 89.93 on Wednesday, only one day after reaching 98.47, according to Investors.com.
"The current valuation leaves little room for additional upside," said Piper Jaffray's Sean Naughton, who changed his rating for GoPro on Tuesday from overweight to neutral. "We remain bullish on GoPro's growth opportunity, both in the near term and longer term, but would wait for a more attractive entry point."
Joseph Wolf from Barclays had an Equal Weight rating for GoPro's stock, saying it is traded close to eight times its revenues from 2015, Business Insider reported. While Wolf added that stocks like GoPro trading at 10 to 20 times revenues is normal, the company's stock price is still being affected by other factors.
"We are fairly certain that a large percentage of the limited 20 million share free float is now owned by retail investors, not institutions," Wolf said. "We do not expect any short-term fundamental misses and think expectations are reasonable. However, we believe the end of the IPO lock-up period for the stock on Dec 22 will dramatically increase the supply of stock and could place pressure on the share price."
The buffeting of GoPro's stock comes at the same time that a fall survey showed favorable opinions shared among teenagers about the company's cameras, Investors.com reported. The survey involved 7,200 high school students in the U.S., 17.2 percent of which said their family used a GoPro capture device. Naughton said this is an increase in the amount of families who owned these devices from 12.6 percent in a spring survey and 9.3 percent last fall.
Naughton added that GoPro grew in popularity on holiday wish lists for teenagers, "doubling its share from six months ago and quadrupling from one year ago."
GoPro was listed by 1.3 percent of the fall survey's participants as their wish, which is a jump from 0.6 percent in the spring survey and 0.3 percent in last year's fall survey, Investors.com reported.
The stock drop also comes at a time when GoPro is competing against Garmin and other companies that work on distinct products. Sony, Panasonic, Samsung and other well-known electronics giants also pose a threat at the moment.
