Forget the Skeptics; Here’s Why I’m Bullish on GPRO Stock
GoPro, Inc.’s (NASDAQ:GPRO) action adventure cameras target people with exciting lives. But if the company’s share price movements in the last month are a good indication, GoPro’s stockholders are just as adventurous.
GoPro stock has been down in market movements this year, losing more than half of its value since August of 2015. While your first instinct might be to do away with any GPRO stock you might be holding, think again; that would mean ignoring GoPro’s value and very high upside potential.
Now that the GoPro stock price has dropped to a more reasonable level as compared to its summer levels, it’s time for a savvy investor to take a serious look at the company. Here are my top three reasons for which I remain bullish on GoPro stock.
GoPro Makes Great Cameras and Has Excellent Brand Value
It’s no secret that GoPro makes fantastic and durable cameras, and that people use them to produce high-quality media for both personal and professional use. But better yet, the company achieves this while keeping its products affordable for the average consumer. GoPro’s action adventure cameras are well-integrated with various other mobile devices, and the company provides the software to manage, edit, and share user-created media content through GoPro Studio.
But it’s GoPro’s name that is its most valuable asset at the moment.
It’s hard to deny that there is an instant association between GoPro’s company name and its products. GoPro’s name is synonymous with high-quality adventure cameras, to the point where a consumer doesn’t just want a durable camera for capturing their adventures; they want a GoPro. This is a very important factor in consumer behavior that often goes ignored by market analysts. It also remains a critical element for successful new tech firms.
GoPro Has Sky-High Growth Potential
Analysts seem to be forgetting that GoPro’s business platform is extremely flexible, to the point where it can be applied to various other growth categories. By applying a blend of external acquisitions and playing into international developments, GoPro is more than capable of branching out to explore emerging tech niches.
For example, GoPro recently bought Kolor, which is a media editing platform that specializes in sophisticated video stitching software which binds GoPro videos into full 360 degree experiences. (Source: “Can GoPro Fend Off Competition And Restore Investor Confidence In GoPro Stock?” AmigoBulls, October 28, 2015.)
But that isn’t the only example, because GoPro has outlined plans for expansion into the drone camera market. Indeed, GoPro plans to release the GoPro Quadcopter early next year, allowing users to fly a drone equipped with full GoPro capture capabilities for aerial pictures and videos. (Source: “GoPro: ‘This Camera Maker Needs a Hero,’” Wall Street Journal, October 28, 2015.)
But what’s perhaps most promising for the GoPro stock price is that the company has continued its plans to launch its very own media editing platform, integrating social media into the action adventure camera experience. Far from being satisfied with its position as the undisputed king of the durable camera market, GoPro wants to be a media operator as well.
This sounds a bit abstract, but consider the resources poured into incentivizing content creation by users. User-generated content will be a central part of GoPro’s evolving and ambitious monetization model for the future.
GoPro Stock is Undervalued
A cursory glance at GoPro’s stock price history in the last few months should normally have any investor concerned, but it only gives us half the picture. The recent slide in the GPRO stock price has in reality pulled shares down to a more manageable level, with the company forward share price-to-earnings ratio standing at 14.
Compare this to other rising tech stocks such as Fitbit Inc. (NYSE:FIT), who has a share price-to-earnings ratio of 38. Need I say more? GoPro is a highly profitable tech firm, and it has the solid financial balance position that proves it.
Here’s the Bottom Line on GoPro Stock
GoPro’s ongoing stock price issues are not in and of themselves rare for growing tech companies, and the very latest decline in the GPRO stock price must be seen as just another phase in the company’s ongoing growth.
Think of it this way: the more time this excellent stock spends at the bottom, the more interest we will be seeing from curious investors and analysts. GoPro stock could be bolstered by its surging brand value, a robust growth strategy, and healthy financial position. With the holiday shopping season to ramp up within the next few weeks, GoPro’s selection of well-priced new items and old favorites will likely work in the company’s favor.