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Is GoPro, Inc. (NASDAQ:GPRO) stock about to collapse?
It’s not as far-fetched as you might think, according to popular financial publication Barron’s, which published a damning report on Monday concluding that GoPro stock is set for a massive decline. (Source: CNBC, last accessed September 22, 2015.)
Markets responded to the report by devaluing the GoPro stock price by eight percent in Monday’s trading, with the company seeing its share price plunge to $32.00. (Source; Business Insider, last accessed September 22, 2015.) Barron’s had predicted that GoPro stock will soon nosedive to $25.00, likening the company to the failed BlackBerry Limited (NASDAQ:BBRY), and writing off the camera manufacturer as a one-hit wonder.
Is the manufacturer of rugged, “go-anywhere” digital cameras on course to repeat the disastrous slide of BlackBerry? Or is it possible that the GoPro stock price can pull itself out of the tailspin it currently finds itself in?
As smartphone manufacturers improve the quality of their cameras, notes Barron’s, GoPro has seen its sales figures steadily drop. (Source: The Wall Street Journal, last accessed September 22, 2015.) The GoPro stock price has followed suit.
But there are other negative points to consider.
GoPro itself stated when it became a publicly traded company that its value lay not only in the quality of its cameras, but also the media surrounding it. (Source: Bloomberg, last accessed September 22, 2015.) But traffic volume on the GoPro site is reportedly down, having peaked in December of 2014 and not picked itself out of the slump since.
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But don’t panic yet.
The GoPro stock price may be down approximately $50.00 since last year, but some analysts remain bullish on the company’s trajectory.
The primary reason for this, of course, is that GoPro has no serious competition in the rugged camera segment specifically. Also of note is the strength of the brand name, where GoPro stock still commands a high degree of respect.
But how did the GPRO stock price get here?
Shares of GoPro skyrocketed by 31% at the company’s debut in June 2014 and peaked at $98.00 in October. The GoPro stock price, however, has been on a downward trajectory ever since, declining to approximately $35.00 per share today, which is essentially the level at which the GoPro stock was at its initial public offering (IPO).
Chart courtesy of www.StockCharts.com
Smartphones, with their ubiquitous nature in daily life and improving cameras, appear to be GoPro’s main fears at the moment.
Barron’s contends that GoPro may be the latest in a long series of one-hit companies that can’t maintain their momentum. The fragility of the company’s market share was underlined by the fact that when Apple Inc. (NASDAQ:AAPL) was granted a camera patent, the GoPro stock price declined by 12%. (Source: CNN, last accessed September 22, 2015.) After details of the upcoming camera upgrade of the new iPhone was released, GoPro stock fell yet again.
These sensitivities do not bode well for the GPRO stock price, with the future of the company now hanging in the air.