This Could Be Huge for GPRO Stock
It won’t be wrong to say that GoPro Inc (NYSE:GPRO) has been one of the worst-performing investments of 2015. Even though the company remains profitable, slowing sales are a question mark on its future. GPRO stock may rebound only if this happens.
GoPro’s Achilles’ heel has been an utter lack of corporate direction in its c-suite. While the stock gets hammered on the market, GoPro’s chief is reportedly busy buying a multimillion-dollar yacht. With sentiments surrounding the stock being so negative, it is understandable the stock’s performance has been appalling.
There’s no other way to put it: competition is ramping up fast and the company has done too little, too late to counter it. As if the two price cuts on the “Hero 4 Session,” which caused a significant dent in its brand image, weren’t enough, GoPro’s marketing initiatives throughout 2015 were also both inadequate and underfunded.
Bears have repeatedly called GoPro a “one trick pony” and founder and CEO Nick Woodman has done little to change that image. He may believe he has done a “terrific job of building an ecosystem of products,” but the market is now calling bluff on management’s empty rhetoric.
The truth is that the cameras may have received great traction with Instagram’s yuppies, but they have not been able to drive significant demand from average consumers. It is correct to say that GoPro’s products only serve a niche. However, that niche, too, seems to be losing interest to substitutes that are arriving in the market ahead of GoPro’s rigs.
Will GoPro “Hero 5 Session” Be a Game-Changer for GPRO Stock?
The company’s virtual reality camera, “Odyssey,” has been on the market for a while now without a successful promotional campaign. Worse yet, it’s been about two months since we first had a sneak peak into GoPro’s drone camera, but nothing concrete has since been announced about its specifications or release.
Now, the company has a new product in the pipeline that is expected to be released at the end of this year, which could turn around its fate should management avoid its past mistakes.
It has not yet been made official, but rumor has it that a one-of-its-kind “Hero 5 Session” camera is on its way, which will offer a next-generation technology not yet seen on any other cameras. The Hero 5 Session is expected to shoot in 8K resolution, which no other action camera in the market offers…yet.
The camera, like all of GoPro’s previous flagship cameras, will be priced for the average consumer market. We can expect this to pull significant demand from enthusiasts looking to get their hands on an affordable next-generation technology not offered by any other company.
Here’s to hoping that GoPro releases it before competition catches up. Ahead of that, however, GoPro is in dire need of an improved marketing strategy, which can be made possible with a reshuffling at the executive level.
The Bottom Line on GPRO Stock
GoPro is still a profitable company with a debt-free balance sheet that holds more than double the cash reserves needed to cover up for short-term liquidity. Fundamentally, the company is still in good shape. At current lows, all the price multiples also look dirt cheap.
At $10.00 apiece, GPRO stock is one bet I’m ready to make in light of the new product launches expected this year. All I’m waiting for now is management’s reevaluation of its strategy.