Alright … I’ll be the one to say what I know many of you are thinking about GoPro Inc (NASDAQ:GPRO) but may be too afraid to voice out of sheer fear of a verbal counterattack. That is, last night’s earnings report from GoPro was anything but impressive. [Cue the hissing and booing.]

Yes, I know most of the mainstream media’s response put a positive spin its first-quarter numbers. Take, for example, Bloomberg’s headline “GoPro Delivers Welcome Surprise as Turnaround Plan Takes Off.” Sounds great. Any quarterly results that are better than expected are a good thing, and who doesn’t love a turnaround story?

On the other hand, it’s not actually clear — based on all the numbers — that GoPro’s turnaround plan is getting any meaningful traction. At the same time, if the best thing anyone can really say about your quarterly results is “they weren’t as bad as expected,” it’s not as if you’re firing all cylinders.

More than anything though, the fact that GPRO stock is down today on the heels of what’s supposed to be a great quarter speaks volumes about what the masses silently think of GoPro’s first quarter of 2017.

GoPro Q1 Earnings

On the chance you’re reading this and haven’t yet heard, GoPro reported an operating loss of 44 cents per share of GoPro stock last quarter, on revenue of $218.6 million. The top line was up 19%, and the loss was much smaller than the year-ago loss of 63 cents per share.

Perhaps more important in this particular case, Q1’s numbers topped expectations. Analysts were only calling for sales of $208.1 million, and a loss of 45 cents per share.

That’s pretty much where the relative success stops, however. A closer, detailed look at the rest of GPRO stock’s numbers is concerning to say the least. Two specific matters come to mind.

1. The GoPro Year-Over-Year Comparison Meant Little

Click to Enlarge Kudos to the company for progress compared to the first quarter of 2016.

Problem is, the first calendar quarter of the year is historically the weakest, and with the Karma drone and the Hero5 cameras available now when they weren’t available in Q1 of 2016, GoPro should have done better on a year-over-year basis. The quarter was still relatively miserable when viewed in the context of the (much) bigger trend.

2. Cash Is Burning Up, Fast

Actually, don’t be too concerned just yet. Though the company ended the fiscal quarter with $74.9 million worth of cash and near-cash in the coffers, it also sold $175 million worth of convertible notes in April, $92 million of which was added to the balance sheet.

There’s also the nagging matter of an ever-increasing number of shares. The notes the company just issued are convertible, which means there’s room and reason for even more dilution in the foreseeable future.

Click to Enlarge Moreover, GoPro lost $111 million on a GAAP basis last quarter, which was actually slightly more than the GAAP loss from the same quarter a year earlier. Assuming not much changes, trajectory-wise, GoPro is still going to run out of money again sometime in the third quarter.

Looking Ahead for GPRO Stock

Don’t get the wrong idea. GoPro does have a few things going for it. It’s still the No. 1 brand name in the business, and it’s an innovation leader; the recently unveiled Fusion 5.2K virtual reality camera is a pretty impressive piece of hardware. Problem is, just because it’s impressive doesn’t mean very many people want to buy it for what it’s apt to cost. The GoPro Omni was a very cool 360-degree camera as well, but with a sticker price of $5,000, the potential market has been amazingly small.

My sixth-grade music teacher preached an analogy that current and would-be owners of GPRO stock would be wise to embrace. That is, you can make the best trombone slide oil in the world, but it doesn’t really matter because the world only needs a couple gallons of the stuff a year.

In that same vein, GoPro makes the best action cameras (and now amateur VR equipment) in the world, but most of the world doesn’t care to own these kinds of devices. The hype, and hope, remains bigger than the actual market size.

In the meantime, while GoPro may have done better than expected last quarter, there’s a distinct lack of profitability that should concern shareholders.

Were it a growth market, the lack of profits now would be palatable; they’ll come later. Action cameras aren’t a growth market though. They’re a commodity, and the market’s pretty well saturated. This company is trapped by that reality, built from the ground up with a cost structure that’s based on the assumption that there’s market growth ahead.

Like I said early on, there’s a reason GPRO stock isn’t making any progress in the wake of what was supposed to be an encouraging quarter … even if some people don’t want to admit it.

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