Action camera maker GoPro Inc (NASDAQ:GPRO) rallied nicely last summer amid turnaround hopes, but those hopes look all but dashed. GoPro stock on Monday is falling below its 2016 lows to plumb new depths.
GPRO executed its initial public offering to great fanfare back in 2014. It rallied to a high of $98.47 on enthusiasm over the Hero camera, the possibility of an exciting new consumer products segment and the way GoPro enabled the “humblebrag” on social media with its top-of-the-helmet perspective.
Three years later, and hope — and GoPro stock — is fading amid increasing competitive pressures, a good-but-still-expensive Hero5 lineup and the Karma drone debacle featuring an embarrassing recall for power loss during flight.
Analysts at Goldman Sachs downgraded GPRO stock on March 6, while Citigroup analysts initiated with a sell rating on March 3.
GoPro Stock Has Potential, But …
As mentioned, the Hero5 cameras were well-received — boosting sales 24% from the year prior in the holiday quarter, breaking a streak of four straight quarters of top line declines. However, the buzz surrounding action cameras is fading.
If the company is going to recover, it will need to find a way to get competitive in the drone and wearable camera space utilizing its technology portfolio, which admittedly is noteworthy (I recently used a Hero5 Black to get some cool underwater clips at a pool party).
I’d like to see GPRO move into the space that Snap Inc (NYSE:SNAP) is blazing with its “Spectacles” sunglasses camera.
The potential is there. But time is short as market value melts away.
The company will next report results on May 4 after the close. Analysts are looking for a loss of 52 cents per share on revenues of $199.7 million.