I’ve said it before, but it merits being said again: GoPro Inc (NASDAQ:GPRO) makes the best action camera in the world. Their functionality, with a lot of help from the company’s mounting accessories, meet the needs of its target market. Unfortunately for owners of GPRO stock, the world just doesn’t need that many action cameras and all the accoutrements that go with them.

That in itself isn’t a cardinal sin. There are a ton of successful niche products out there. Catering to the needs of left-handed people is one of them. So is beard-care. (Who knew, right?)

Action cameras — along with pro-am caliber 360-degree and virtual-reality apparatus — are still another niche market that GoPro could readily dominate, leveraging its good name. Problem is, GoPro CEO Nick Woodman continues to operate the company in such a way that suggests he views it as a mass market industry.

The good news is, thanks to the more-than-90% setback that GPRO stock has suffered since its mid-2012 high, shares have already priced in that reset.

Not a Mass-Market Product

Daring to point out the flawed logic of GoPro’s scale is a dangerous business. Most of those bears who agree with the premise got out of their position in GoPro stock a long time ago, while the remaining believers in the company’s future are quick to fiercely come to its defense … taking dead aim at the messenger along with the message itself.

To stave off the assembly of that latter crowd before they grab their pitchforks and torches, let me just say that at a trailing price/sales ratio of less than 1, I think GPRO stock is at or near a bottom and won’t likely move much lower (relative to its implosion thus far).

On the other hand, loyalists may be disappointed in when GoPro records and how far it climbs once it does.

Most of those investors will point to the launch of its Fusion, which films 360 degrees, making it capable of creating virtual reality content at 5.2K resolution. The hardware is supposed to be available for purchase before the end of this year, and as the Motley Fool’s Travis Hoium put it, “Interest is off the charts.”

Interest doesn’t necessarily pay the bills, though. Of the 20,000 applicants looking to be part of the Fusion’s beta test, odds are good most of their interest was only palpable as long as the equipment was going to be free.

Remember, it was in August of last year GoPro that launched its Omni VR rig, which was a predecessor to Fusion. The optimism surrounding it mirrored the optimism regarding Fusion, but as a refresher, the Omni didn’t end up creating sea change for GoPro. Most balked at the $5,000 price tag, and those buyers that could afford the rig didn’t exactly buy it in droves.

The Fusion is a better technology, to be fair, but even if it’s more affordable than the Omni, how many can it really expect to sell? The average amateur enthusiast may be willing to strap a Hero 5 camera to his or her bike helmet for a few hundred bucks, but anything above four figures pushes it out of reach for most.

To that end, any meaningful growth GPRO stock is going to muster is going to be driven by its consumer-oriented cameras like the Hero. Even then, competitors have had enough time to develop more affordable and similarly functional alternatives. Many smartphones now sport camera-tech that rivals that of GoPro’s Hero.

Indeed, competitors have also been making more affordable VR-filming equipment as well, preemptively putting the kibosh on whatever demand the Fusion has been trying to stir up.

Point is, being the best isn’t good enough.

The company that makes the best trombone-slide oil in the world only needs to make a few gallons of it every year. The average trombone player doesn’t want or need the absolute best when a more affordable and functional choice is readily available.

Looking Ahead for GPRO Stock

While GoPro’s growth opportunities look bleak, as was noted, this reality has already been baked into shares. GoPro’s market cap is now less than its annual revenue, whereas the average company’s market cap is about 2.5 times its yearly sales.

The weak spot for GPRO, of course, is its lack of profits.

When, or if, GoPro is able to get on a path to profitability largely depends on when, or if, Woodman recognizes how much time and how many resources have been wasted on trying to develop the next big thing (like the Omni, or the Fusion, or the Karma, or the media venue, etc.) when he could have been focusing on creating the very best action camera in the world at a stunningly low cost that prevented other players — players that lacked the scale GoPro has — from jumping into the market.

It was a typical rookie mistake … spending a lot for just a little more growth. In retrospect, the company and its investors would have been better served by thinking small rather than thinking big.

Either way, if (and arguably when) the Fusion fizzles, that may well be a much-needed wake-up call for Woodman et al to focus on doing what GoPro does best, and doing that cost-effectively. In fact, with only $75 million left in the bank as of the end of the first quarter and the company easily burning more than that in each of the past several quarters, Woodman isn’t going to have many other options besides hunkering down and focusing on cost-control.

But that may be just what the doctor ordered. Just don’t expect any turnaround to be immediate.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.