Goldman Sachs reiterates Insta360's Buy rating; the innovative product portfolio remains the core growth driver

Overview

This report is the meeting note from Goldman Sachs after hosting Insta360's CEO at the All Around You product demo during the Asia Communacopia + Technology conference. The central conclusion is that Insta360's growth drivers come from continuous product innovation, strong software capabilities, and an accessory ecosystem that expands around imaging use cases. Goldman Sachs reiterates its positive view on the company and maintains a Buy rating with a Rmb311 target price.

Core views

Goldman Sachs believes concerns about rising storage costs and intensifying competition are increasing, but Insta360 can still attract more consumers, expand its customer base, and reduce reliance on price competition thanks to its capabilities in 360-degree imaging, action cameras, drones, AI editing, image stabilization, and creative accessories. The report expects the company's 2025 and 1Q26A revenue to grow 75% and 83% YoY, respectively, with 2026E-2028E revenue CAGR of 64% and net income CAGR of 81%.

Analysis framework

The report combines meeting notes with fundamental forecasts: it first summarizes the product logic shown in the CEO's demo, including Antigravity A1, AI reconstruction, FlowState Stabilization, AI Director, and accessory expansion, and then maps these product innovations to revenue structure, margin improvement, net income growth, and target price valuation. The valuation section uses a 2030E P/E target multiple and discounts it back to 2027E.

Methodology notes

• Valuation methodsP/E discount valuation

  20x 2030E P/E discounted to 2027E

  Goldman Sachs' 12-month target price of Rmb311 is based on a 20x 2030E P/E and discounted back to 2027E using a 13.5% cost of equity; the target multiple references the PEG&M framework for consumer electronics peers, namely the relationship among 2026E P/E, 2027E net income growth, and operating margin.

• Product analysisUse-case expansion and user base expansion

  Expand the customer base through innovative design

  The report views Antigravity A1, 360-degree cameras, AI editing, and accessories as key paths to expand the user base, extending from professional users to everyday users, phone selfie users, and instant imaging users.

• Goldman Sachs internal frameworkGS Factor Profile

  Comprehensive comparison across Growth, Financial Returns, Multiple, and Integrated

  The disclosure section notes that GS Factor Profile compares stocks against the market and industry peers through Growth, Financial Returns, valuation Multiple, and an Integrated percentile, but the main body of this report does not provide Insta360's specific percentile results.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Insta360 688775.SS

  Covered company, Buy rating maintained

  Strengths

  Strong technology capabilities and ongoing product innovation; Antigravity A1, 360-degree imaging, AI Director, FlowState Stabilization, and the accessory ecosystem help expand the customer base; revenue and net income are expected to maintain high growth.

  Weaknesses

  Growth expectations depend on continued volume ramp-up in action cameras, 360 cameras, drones, and accessories; the hardware business may still be affected by costs and competition.

  Comparison

  The report links the target multiple to the PEG&M framework for consumer electronics peers and notes that action cameras still account for 55% of revenue in 2028E, with 360 cameras and drones as important subsequent contributors.

  Risks

  Competition becomes more intense than expected, action camera and 360 camera shipment growth falls short of expectations, and accessory attach rates are lower than expected.

• Antigravity A1

  Core product showcase case

  Strengths

  Combines an 8K 360-degree camera, a drone, and a VR headset to support immersive FPV experiences; 360 OmniLink low-latency transmission, a hidden-body design, and stitching software enhance differentiation.

  Weaknesses

  The commercial contribution still needs to be validated through drone sales, user acceptance, and ecosystem expansion.

  Comparison

  Compared with traditional drone-mounted camera solutions, A1 creates a floating-camera effect through dual lenses and a body blind-spot design.

  Risks

  Drone market competition, costs, supply chain issues, and user education may affect volume ramp-up.

• Action camera business

  Largest revenue source in 2028E

  Strengths

  Expected to contribute 55% of revenue in 2028E, making it the company's main revenue pillar.

  Weaknesses

  Sensitive to shipment growth; if market demand or the competitive landscape deteriorates, revenue elasticity may weaken.

  Comparison

  Revenue share is higher than that of 360 cameras, accessories, and drones.

  Risks

  Action camera shipment growth falls short of expectations.

• Accessory business

  Expands use cases and customer base

  Strengths

  Accessories such as pocket printers and Snap can expand users from sports enthusiasts and content creators to everyday users, instant imaging users, and phone selfie users.

  Weaknesses

  Revenue contribution depends on accessory attach rates and consumer acceptance.

  Comparison

  Expected to account for 19% of revenue in 2028E, close to the 20% share of 360 cameras.

  Risks

  Accessory attach rates fall short of expectations.

Key data

• Report date2026-05-18Equity Research, published at 3:48PM HKT.
• RatingBuyGoldman Sachs maintains its Buy rating.
• Target priceRmb31112-month target price unchanged.
• Valuation basis20x 2030E P/E, COE 13.5%Discounted back to 2027E to derive the target price.
• 2025 revenue growth+75% YoYThe report says company revenue grew 75% YoY in 2025.
• 1Q26A revenue growth+83% YoYThe report says 1Q26A revenue grew 83% YoY.
• 2026-2028E revenue CAGR+64%Goldman Sachs expects 2026E-2028E revenue CAGR of 64%.
• 2026-2028E net income CAGR+81%Goldman Sachs expects net income CAGR of 81% as expense ratios improve.
• 2028E revenueRmb47.3bnThe chart shows total revenue of Rmb47.3bn in 2028E.
• 2028E revenue mixAction camera 55%, 360 camera 20%, accessories 19%, drone 6%, others 0%From the 2028E revenue breakdown donut chart.
• 2030E net incomeabout Rmb9.0bnThe chart shows net income rising from about Rmb1.0bn in 2025 to about Rmb9.0bn in 2030E.
• Operating margin trendabout 9% in 2025, about 14% in 2030EThe chart shows an overall upward trend in operating margin.

Impact & implications

If the report's assumptions hold, Insta360's investment logic will evolve from a single-track hardware volume expansion story to a user expansion story jointly driven by hardware, software algorithms, AI editing, and an accessory ecosystem. Action cameras will remain the revenue mainstay, but 360 cameras, drones, and accessories will become important mid-term growth additions. Innovation capability also helps the company avoid competing solely through price cuts.

Risks

• Competition is more intense than expected, which could weaken pricing power and growth momentum.
• Action camera and 360 camera shipment growth falls short of expectations.
• Accessory attach rates are lower than expected, affecting use-case expansion and revenue mix improvement.
• Rising storage costs may squeeze hardware margins.
• Commercialization progress for new products such as drones falls short of expectations, which could affect mid-term revenue mix assumptions.

What to watch

• The launch pace of Antigravity A1, user feedback, and its contribution to drone revenue.
• Whether action camera and 360 camera shipment growth matches Goldman Sachs' forecast.
• Whether software capabilities such as AI Director, FlowState Stabilization, and 360 OmniLink continue to create product differentiation.
• Whether accessory attach rates improve, especially for everyday-user products such as pocket printers and Snap.
• Changes in storage costs and their impact on gross margin and operating margin.
• Whether competitors intensify price competition through price cuts or new product launches.