SAN MATEO -- GoPro continued its Wall Street rally Friday, with shares popping more than 14 percent by the close of the company's second day of trading, but investors warned that the sports video-camcorder maker has been overvalued.

Shares of GoPro, which went public Thursday on the Nasdaq, reached a high of $40.47 during Friday trading, a 29 percent increase over the closing price the day before and nearly 69 percent above the initial public offering price of $24. Shares closed Friday at $35.90, and are now valued at 60 times the company's earnings in 2013. GoPro is valued at about $4.4 billion, nearly 50 percent greater than its market value before this week's IPO.

"Everyone is having fun and jumping in, but (individual) investors don't tend to hold (shares) for long," said Derek Thomson, director of capital markets group at PricewaterhouseCoopers. "The one-day pops are fun to watch, but at the end of the day they're getting judged based on their performance at the quarter and end of the year."

San Mateo-based GoPro soared in its market debut in part on its own merits -- profits that since 2011 total about $122 million, healthy finances and efficiently run organization. But it has also benefited from an undeniable "cool factor" -- its cameras capture the adrenaline rush, power and rawness of extreme sports in the wild of the ocean or mountains. And that, more than the company's potential to become a successful media business or provide a return for shareholders, has some investors throwing money at GoPro, analysts said.


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The company, which makes wearable, high-definition cameras that are lightweight and durable enough to survive most outdoor elements and wipeouts on the slopes or trails, may have an extra dose of sex appeal because it is the most recognized company to go public in months. Lately, the IPO market has been dominated by biotech and health care companies, which don't carry the same resonance with consumers.

"Outside of Twitter and Facebook it's the biggest IPO we've seen in a while, and it also comes after a gap of high-profile names," Brendan Connaughton, partner and chief investment officer with San Francisco-based ClearPath Capital. "People in Peoria, Illinois, don't know some genome-tech company coming out of Silicon Valley but they know GoPro."

Nigam Arora, an entrepreneur and founder of investment blog The Arora Report, expects the company's valuation to drop closer to $1 billion once the media fanfare and consumer excitement fade. He also said GoPro should be trading closer to $10; other analysts said a more accurate price would be in the $20 range.

"A good company and a good product does not mean it's a good stock or a good investment. GoPro is saying don't value us like a gadget company, value us like a media company. But my contention is they haven't made many dollars selling media," Arora said.

In its IPO filing, GoPro laid out plans to become a media company, creating platforms to stream the video GoPro users film on their cameras. However, it doesn't expect to make money from those efforts this year, and many experts expect it will be several years before GoPro could become a full-fledged media company.

"If they want to go into that media space, they are going to be going against some pretty stiff competition, whether it's Twitter or Google," Connaughton said.

Contact Heather Somerville at 510-208-6413. Follow her at Twitter.com/heathersomervil.